Correlation Between LS 1x and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both LS 1x 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 LS 1x and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS 1x Coinbase and iShares MSCI Japan, you can compare the effects of market volatilities on LS 1x 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 LS 1x with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS 1x and IShares MSCI.
Diversification Opportunities for LS 1x and IShares MSCI
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COI1 and IShares is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding LS 1x Coinbase 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 LS 1x 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 LS 1x Coinbase 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 LS 1x i.e., LS 1x and IShares MSCI go up and down completely randomly.
Pair Corralation between LS 1x and IShares MSCI
Assuming the 90 days trading horizon LS 1x Coinbase is expected to under-perform the IShares MSCI. In addition to that, LS 1x is 4.84 times more volatile than iShares MSCI Japan. It trades about -0.12 of its total potential returns per unit of risk. iShares MSCI Japan is currently generating about 0.01 per unit of volatility. If you would invest 492.00 in iShares MSCI Japan on December 30, 2024 and sell it today you would earn a total of 1.00 from holding iShares MSCI Japan or generate 0.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LS 1x Coinbase vs. iShares MSCI Japan
Performance |
Timeline |
LS 1x Coinbase |
iShares MSCI Japan |
LS 1x and IShares MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LS 1x and IShares MSCI
The main advantage of trading using opposite LS 1x and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS 1x 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.LS 1x vs. iShares MSCI Japan | LS 1x vs. Amundi EUR High | LS 1x vs. iShares JP Morgan | LS 1x vs. Xtrackers MSCI |
IShares MSCI vs. iShares JP Morgan | IShares MSCI vs. iShares MSCI Europe | IShares MSCI vs. iShares Nasdaq Biotechnology | IShares MSCI vs. iShares Global Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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