Correlation Between Xtrackers MSCI and IQ Candriam
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and IQ Candriam 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 Xtrackers MSCI and IQ Candriam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI USA and IQ Candriam ESG, you can compare the effects of market volatilities on Xtrackers MSCI and IQ Candriam 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 Xtrackers MSCI with a short position of IQ Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IQ Candriam.
Diversification Opportunities for Xtrackers MSCI and IQ Candriam
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and IQSU is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI USA and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG and Xtrackers 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 Xtrackers MSCI USA are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and IQ Candriam go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IQ Candriam
Given the investment horizon of 90 days Xtrackers MSCI is expected to generate 2.02 times less return on investment than IQ Candriam. In addition to that, Xtrackers MSCI is 1.18 times more volatile than IQ Candriam ESG. It trades about 0.08 of its total potential returns per unit of risk. IQ Candriam ESG is currently generating about 0.19 per unit of volatility. If you would invest 4,963 in IQ Candriam ESG on September 12, 2024 and sell it today you would earn a total of 107.00 from holding IQ Candriam ESG or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI USA vs. IQ Candriam ESG
Performance |
| Timeline |
| Xtrackers MSCI USA |
| IQ Candriam ESG |
Xtrackers MSCI and IQ Candriam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IQ Candriam
The main advantage of trading using opposite Xtrackers MSCI and IQ Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, IQ Candriam 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 IQ Candriam will offset losses from the drop in IQ Candriam's long position.| Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. Vanguard Real Estate | Xtrackers MSCI vs. Vanguard Total Bond | Xtrackers MSCI vs. Vanguard High Dividend |
| IQ Candriam vs. IQ Candriam ESG | IQ Candriam vs. Xtrackers MSCI USA | IQ Candriam vs. Xtrackers SP 500 | IQ Candriam vs. Nuveen ESG Large Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |