Correlation Between Ethereum and IShares MSCI

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

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

Diversification Opportunities for Ethereum and IShares MSCI

0.04

Correlation Coefficient

Ethereum  IShares MSCI

Significant diversification

The 3 months correlation between Ethereum and IShares is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World and Ethereum 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 Ethereum 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 World has no effect on the direction of Ethereum i.e., Ethereum and IShares MSCI go up and down completely randomly.

Pair Corralation between Ethereum and IShares MSCI

Assuming the 90 days trading horizon Ethereum is expected to under-perform the IShares MSCI. In addition to that, Ethereum is 3.01 times more volatile than iShares MSCI World. It trades about -0.2 of its total potential returns per unit of risk. iShares MSCI World is currently generating about -0.15 per unit of volatility. If you would invest  707.00  in iShares MSCI World on October 11, 2024 and sell it today you would lose (25.00) from holding iShares MSCI World or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Ethereum  vs.  iShares MSCI World

Ethereum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares MSCI World

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ethereum and IShares MSCI

The main advantage of trading using opposite Ethereum and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum 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 Ethereum and iShares MSCI World 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.