Correlation Between VanEck Global and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Global and IShares MSCI at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VanEck Global and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Global Real and iShares MSCI China, you can compare the effects of market volatilities on VanEck Global and IShares MSCI and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VanEck Global with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Global and IShares MSCI.
Diversification Opportunities for VanEck Global and IShares MSCI
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and IShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Real and iShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI China and VanEck Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VanEck Global Real are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI China has no effect on the direction of VanEck Global i.e., VanEck Global and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Global and IShares MSCI
Assuming the 90 days trading horizon VanEck Global Real is expected to generate 0.38 times more return on investment than IShares MSCI. However, VanEck Global Real is 2.62 times less risky than IShares MSCI. It trades about 0.3 of its potential returns per unit of risk. iShares MSCI China is currently generating about -0.08 per unit of risk. If you would invest 3,980 in VanEck Global Real on September 1, 2024 and sell it today you would earn a total of 201.00 from holding VanEck Global Real or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
VanEck Global Real vs. iShares MSCI China
Performance |
| Timeline |
| VanEck Global Real |
| iShares MSCI China |
VanEck Global and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Global and IShares MSCI
The main advantage of trading using opposite VanEck Global and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Global position performs unexpectedly, IShares MSCI can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares MSCI will offset losses from the drop in IShares MSCI's long position.| VanEck Global vs. VanEck Morningstar Developed | VanEck Global vs. Vanguard FTSE All World | VanEck Global vs. Vanguard FTSE All World | VanEck Global vs. Vanguard SP 500 |
| IShares MSCI vs. iShares Core MSCI | IShares MSCI vs. iShares Core MSCI | IShares MSCI vs. iShares Core MSCI | IShares MSCI vs. iShares NASDAQ 100 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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