Correlation Between IShares MSCI and CI First
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and CI First 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 CI First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI EAFE and CI First Asset, you can compare the effects of market volatilities on IShares MSCI and CI First 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 CI First. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and CI First.
Diversification Opportunities for IShares MSCI and CI First
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and MXF is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and CI First Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI First Asset 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 EAFE are associated (or correlated) with CI First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI First Asset has no effect on the direction of IShares MSCI i.e., IShares MSCI and CI First go up and down completely randomly.
Pair Corralation between IShares MSCI and CI First
Assuming the 90 days trading horizon iShares MSCI EAFE is expected to generate 0.31 times more return on investment than CI First. However, iShares MSCI EAFE is 3.26 times less risky than CI First. It trades about 0.08 of its potential returns per unit of risk. CI First Asset is currently generating about -0.16 per unit of risk. If you would invest 3,603 in iShares MSCI EAFE on September 1, 2024 and sell it today you would earn a total of 35.00 from holding iShares MSCI EAFE or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI EAFE vs. CI First Asset
Performance |
| Timeline |
| iShares MSCI EAFE |
| CI First Asset |
IShares MSCI and CI First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and CI First
The main advantage of trading using opposite IShares MSCI and CI First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, CI First 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 CI First will offset losses from the drop in CI First's long position.| IShares MSCI vs. iShares SPTSX Completion | IShares MSCI vs. iShares Canadian Universe | IShares MSCI vs. iShares Core SP | IShares MSCI vs. iShares SPTSX Capped |
| CI First vs. NBI High Yield | CI First vs. NBI Unconstrained Fixed | CI First vs. Mackenzie Developed ex North | CI First vs. BMO Short Term Bond |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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