Correlation Between Aberdeen New and IShares MSCI

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

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

Diversification Opportunities for Aberdeen New and IShares MSCI

-0.36

Correlation Coefficient

Aberdeen New  IShares MSCI

Very good diversification

The 3 months correlation between Aberdeen and IShares is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and iShares MSCI Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Japan and Aberdeen New 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 Aberdeen New India 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 Japan has no effect on the direction of Aberdeen New i.e., Aberdeen New and IShares MSCI go up and down completely randomly.

Pair Corralation between Aberdeen New and IShares MSCI

Assuming the 90 days trading horizon Aberdeen New India is expected to under-perform the IShares MSCI. In addition to that, Aberdeen New is 1.55 times more volatile than iShares MSCI Japan. It trades about -0.18 of its total potential returns per unit of risk. iShares MSCI Japan is currently generating about -0.04 per unit of volatility. If you would invest  514.00  in iShares MSCI Japan on December 3, 2024 and sell it today you would lose (10.00) from holding iShares MSCI Japan or give up 1.95% of portfolio value over 90 days.

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

Aberdeen New India  vs.  iShares MSCI Japan

Aberdeen New India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen New India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

iShares MSCI Japan

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aberdeen New and IShares MSCI

The main advantage of trading using opposite Aberdeen New and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen New 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 Aberdeen New India and iShares MSCI Japan 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.