Correlation Between IShares MSCI and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI KLD and iShares MSCI Global, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares MSCI.
Diversification Opportunities for IShares MSCI and IShares MSCI
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI KLD and iShares MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Global 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 KLD 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 Global has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares MSCI
Considering the 90-day investment horizon iShares MSCI KLD is expected to generate 0.92 times more return on investment than IShares MSCI. However, iShares MSCI KLD is 1.09 times less risky than IShares MSCI. It trades about 0.08 of its potential returns per unit of risk. iShares MSCI Global is currently generating about -0.01 per unit of risk. If you would invest 10,290 in iShares MSCI KLD on September 26, 2024 and sell it today you would earn a total of 1,055 from holding iShares MSCI KLD or generate 10.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.21% |
Values | Daily Returns |
iShares MSCI KLD vs. iShares MSCI Global
Performance |
Timeline |
iShares MSCI KLD |
iShares MSCI Global |
IShares MSCI and IShares MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares MSCI and IShares MSCI
The main advantage of trading using opposite IShares MSCI and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.IShares MSCI vs. SPDR SP 500 | IShares MSCI vs. iShares Core SP | IShares MSCI vs. Vanguard Dividend Appreciation | IShares MSCI vs. Vanguard Large Cap Index |
IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. SPDR SSGA Gender | IShares MSCI vs. iShares MSCI KLD | IShares MSCI vs. SPDR SP 500 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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