Correlation Between Aalberts Industries and IShares MSCI

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

By analyzing existing cross correlation between Aalberts Industries NV and iShares MSCI ACWI, you can compare the effects of market volatilities on Aalberts Industries 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 Aalberts Industries with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and IShares MSCI.

Diversification Opportunities for Aalberts Industries and IShares MSCI

-0.05

Correlation Coefficient

Aalberts Industries  IShares MSCI

Good diversification

The 3 months correlation between Aalberts and IShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV 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 Aalberts Industries 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 Aalberts Industries NV 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 Aalberts Industries i.e., Aalberts Industries and IShares MSCI go up and down completely randomly.

Pair Corralation between Aalberts Industries and IShares MSCI

Assuming the 90 days trading horizon Aalberts Industries NV is expected to under-perform the IShares MSCI. In addition to that, Aalberts Industries is 2.43 times more volatile than iShares MSCI ACWI. It trades about -0.09 of its total potential returns per unit of risk. iShares MSCI ACWI is currently generating about 0.13 per unit of volatility. If you would invest  7,584  in iShares MSCI ACWI on August 30, 2024 and sell it today you would earn a total of  1,010  from holding iShares MSCI ACWI or generate 13.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aalberts Industries NV  vs.  iShares MSCI ACWI

Aalberts Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aalberts Industries NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aalberts Industries is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

iShares MSCI ACWI

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI ACWI are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Aalberts Industries and IShares MSCI

The main advantage of trading using opposite Aalberts Industries and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries 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.

The idea behind Aalberts Industries NV and iShares MSCI ACWI 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.