Correlation Between IShares MSCI and ProShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and ProShares Nasdaq 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 IShares MSCI and ProShares Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and ProShares Nasdaq 100 Dorsey, you can compare the effects of market volatilities on IShares MSCI and ProShares Nasdaq 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 IShares MSCI with a short position of ProShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and ProShares Nasdaq.
Diversification Opportunities for IShares MSCI and ProShares Nasdaq
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and ProShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and ProShares Nasdaq 100 Dorsey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Nasdaq 100 and IShares MSCI 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 iShares MSCI USA are associated (or correlated) with ProShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Nasdaq 100 has no effect on the direction of IShares MSCI i.e., IShares MSCI and ProShares Nasdaq go up and down completely randomly.
Pair Corralation between IShares MSCI and ProShares Nasdaq
Given the investment horizon of 90 days iShares MSCI USA is expected to generate 0.37 times more return on investment than ProShares Nasdaq. However, iShares MSCI USA is 2.74 times less risky than ProShares Nasdaq. It trades about 0.22 of its potential returns per unit of risk. ProShares Nasdaq 100 Dorsey is currently generating about 0.0 per unit of risk. If you would invest 9,190 in iShares MSCI USA on November 28, 2024 and sell it today you would earn a total of 218.00 from holding iShares MSCI USA or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI USA vs. ProShares Nasdaq 100 Dorsey
Performance |
| Timeline |
| iShares MSCI USA |
| ProShares Nasdaq 100 |
IShares MSCI and ProShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and ProShares Nasdaq
The main advantage of trading using opposite IShares MSCI and ProShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, ProShares Nasdaq 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 ProShares Nasdaq will offset losses from the drop in ProShares Nasdaq's long position.| IShares MSCI vs. Invesco SP 500 | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA |
| ProShares Nasdaq vs. Invesco ESG NASDAQ | ProShares Nasdaq vs. ProShares Ultra Cloud | ProShares Nasdaq vs. Global X NASDAQ |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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