Correlation Between IShares MSCI and V Square

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

By analyzing existing cross correlation between iShares MSCI ACWI and V Square Quantitative Management, you can compare the effects of market volatilities on IShares MSCI and V Square 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 V Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and V Square.

Diversification Opportunities for IShares MSCI and V Square

0.61

Correlation Coefficient

IShares MSCI  V Square

Poor diversification

The 3 months correlation between IShares and VMAT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI ACWI and V Square Quantitative Manageme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Square Quantitative 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 ACWI are associated (or correlated) with V Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Square Quantitative has no effect on the direction of IShares MSCI i.e., IShares MSCI and V Square go up and down completely randomly.

Pair Corralation between IShares MSCI and V Square

If you would invest  19,734  in iShares MSCI ACWI on September 25, 2024 and sell it today you would earn a total of  35.00  from holding iShares MSCI ACWI or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

iShares MSCI ACWI  vs.  V Square Quantitative Manageme

iShares MSCI ACWI

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI ACWI are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares MSCI is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

V Square Quantitative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IShares MSCI and V Square

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

The idea behind iShares MSCI ACWI and V Square Quantitative Management 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.