Correlation Between IShares Core and Swisscanto

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

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

Diversification Opportunities for IShares Core and Swisscanto

-0.44

Correlation Coefficient

IShares Core  Swisscanto

Very good diversification

The 3 months correlation between IShares and Swisscanto is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Swisscanto CH Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swisscanto CH Real and IShares Core 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 Core MSCI are associated (or correlated) with Swisscanto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swisscanto CH Real has no effect on the direction of IShares Core i.e., IShares Core and Swisscanto go up and down completely randomly.

Pair Corralation between IShares Core and Swisscanto

Assuming the 90 days trading horizon IShares Core is expected to generate 2.09 times less return on investment than Swisscanto. In addition to that, IShares Core is 1.35 times more volatile than Swisscanto CH Real. It trades about 0.02 of its total potential returns per unit of risk. Swisscanto CH Real is currently generating about 0.05 per unit of volatility. If you would invest  18,500  in Swisscanto CH Real on September 28, 2024 and sell it today you would earn a total of  650.00  from holding Swisscanto CH Real or generate 3.51% return on investment over 90 days.

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

iShares Core MSCI  vs.  Swisscanto CH Real

iShares Core MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Core MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Swisscanto CH Real

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swisscanto CH Real are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Swisscanto is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares Core and Swisscanto

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

The idea behind iShares Core MSCI and Swisscanto CH Real 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.