Correlation Between VIIX and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VIIX 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 VIIX and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIIX and iShares MSCI India, you can compare the effects of market volatilities on VIIX 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 VIIX with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIIX and IShares MSCI.
Diversification Opportunities for VIIX and IShares MSCI
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIIX and IShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding VIIX and iShares MSCI India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI India and VIIX 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 VIIX 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 India has no effect on the direction of VIIX i.e., VIIX and IShares MSCI go up and down completely randomly.
Pair Corralation between VIIX and IShares MSCI
Given the investment horizon of 90 days VIIX is expected to under-perform the IShares MSCI. In addition to that, VIIX is 4.28 times more volatile than iShares MSCI India. It trades about -0.14 of its total potential returns per unit of risk. iShares MSCI India is currently generating about 0.05 per unit of volatility. If you would invest 4,392 in iShares MSCI India on August 23, 2024 and sell it today you would earn a total of 927.00 from holding iShares MSCI India or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.06% |
| Values | Daily Returns |
VIIX vs. iShares MSCI India
Performance |
| Timeline |
| VIIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares MSCI India |
VIIX and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIIX and IShares MSCI
The main advantage of trading using opposite VIIX and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIIX 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.| VIIX vs. Invesco DB Dollar | VIIX vs. iPath Series B | VIIX vs. ProShares VIX Short Term | VIIX vs. ProShares VIX Mid Term |
| IShares MSCI vs. iShares India 50 | IShares MSCI vs. iShares MSCI China | IShares MSCI vs. VanEck Vietnam ETF | IShares MSCI vs. WisdomTree India Earnings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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