Correlation Between Vident Core and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Vident Core 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 Vident Core and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vident Core Bond and iShares MSCI ACWI, you can compare the effects of market volatilities on Vident Core 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 Vident Core with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vident Core and IShares MSCI.
Diversification Opportunities for Vident Core and IShares MSCI
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vident and IShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vident Core Bond and iShares MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI ACWI and Vident Core 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 Vident Core Bond 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 ACWI has no effect on the direction of Vident Core i.e., Vident Core and IShares MSCI go up and down completely randomly.
Pair Corralation between Vident Core and IShares MSCI
Given the investment horizon of 90 days Vident Core is expected to generate 4.2 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, Vident Core Bond is 2.06 times less risky than IShares MSCI. It trades about 0.05 of its potential returns per unit of risk. iShares MSCI ACWI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,978 in iShares MSCI ACWI on September 3, 2024 and sell it today you would earn a total of 6,111 from holding iShares MSCI ACWI or generate 43.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vident Core Bond vs. iShares MSCI ACWI
Performance |
| Timeline |
| Vident Core Bond |
| iShares MSCI ACWI |
Vident Core and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vident Core and IShares MSCI
The main advantage of trading using opposite Vident Core and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vident Core 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.| Vident Core vs. Vident Core Equity | Vident Core vs. Vident International Equity | Vident Core vs. Invesco Variable Rate | Vident Core vs. FlexShares Credit Scored Corporate |
| IShares MSCI vs. SmartETFs Asia Pacific | IShares MSCI vs. Listed Funds Trust | IShares MSCI vs. iShares AsiaPacific Dividend | IShares MSCI vs. ProShares MSCI Emerging |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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