Correlation Between IShares MSCI and Camden National

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

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

Diversification Opportunities for IShares MSCI and Camden National

-0.13

Correlation Coefficient

IShares MSCI  Camden National

Good diversification

The 3 months correlation between IShares and Camden is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI France and Camden National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden National 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 France are associated (or correlated) with Camden National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden National has no effect on the direction of IShares MSCI i.e., IShares MSCI and Camden National go up and down completely randomly.

Pair Corralation between IShares MSCI and Camden National

Considering the 90-day investment horizon iShares MSCI France is expected to generate 0.81 times more return on investment than Camden National. However, iShares MSCI France is 1.24 times less risky than Camden National. It trades about 0.18 of its potential returns per unit of risk. Camden National is currently generating about -0.04 per unit of risk. If you would invest  3,581  in iShares MSCI France on December 29, 2024 and sell it today you would earn a total of  454.00  from holding iShares MSCI France or generate 12.68% return on investment over 90 days.

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

iShares MSCI France  vs.  Camden National

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.

Camden National

Risk-Adjusted Performance

Very Weak

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

Pair Trading with IShares MSCI and Camden National

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

The idea behind iShares MSCI France and Camden National 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.