Correlation Between IShares MSCI and Bucher Industries

Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Bucher Industries 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 Bucher Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares MSCI Brazil and Bucher Industries AG, you can compare the effects of market volatilities on IShares MSCI and Bucher Industries 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 Bucher Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Bucher Industries.

Diversification Opportunities for IShares MSCI and Bucher Industries

0.79

Correlation Coefficient

IShares MSCI  Bucher Industries

Poor diversification

The 3 months correlation between IShares and Bucher is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Brazil and Bucher Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucher Industries 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 Brazil are associated (or correlated) with Bucher Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bucher Industries has no effect on the direction of IShares MSCI i.e., IShares MSCI and Bucher Industries go up and down completely randomly.

Pair Corralation between IShares MSCI and Bucher Industries

Assuming the 90 days trading horizon iShares MSCI Brazil is expected to under-perform the Bucher Industries. In addition to that, IShares MSCI is 1.17 times more volatile than Bucher Industries AG. It trades about -0.04 of its total potential returns per unit of risk. Bucher Industries AG is currently generating about 0.0 per unit of volatility. If you would invest  33,186  in Bucher Industries AG on October 5, 2024 and sell it today you would lose (336.00) from holding Bucher Industries AG or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

iShares MSCI Brazil  vs.  Bucher Industries AG

iShares MSCI Brazil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Brazil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Bucher Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bucher Industries AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with IShares MSCI and Bucher Industries

The main advantage of trading using opposite IShares MSCI and Bucher Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Bucher Industries 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 Bucher Industries will offset losses from the drop in Bucher Industries' long position.

The idea behind iShares MSCI Brazil and Bucher Industries AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.