Correlation Between DXGE and IShares MSCI

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

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

Diversification Opportunities for DXGE and IShares MSCI

0.0

Correlation Coefficient

DXGE  IShares MSCI

Pay attention - limited upside

The 3 months correlation between DXGE and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DXGE and iShares MSCI France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI France and DXGE 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 DXGE 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 France has no effect on the direction of DXGE i.e., DXGE and IShares MSCI go up and down completely randomly.

Pair Corralation between DXGE and IShares MSCI

If you would invest  3,581  in iShares MSCI France on December 28, 2024 and sell it today you would earn a total of  474.00  from holding iShares MSCI France or generate 13.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DXGE  vs.  iShares MSCI France

DXGE

Risk-Adjusted Performance

Very Weak

Over the last 90 days DXGE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, DXGE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares MSCI France

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI France are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, IShares MSCI reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DXGE and IShares MSCI

The main advantage of trading using opposite DXGE and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXGE 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 DXGE and iShares MSCI France 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .