Correlation Between IShares Core and EMQQ Emerging

Can any of the company-specific risk be diversified away by investing in both IShares Core and EMQQ Emerging 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 EMQQ Emerging 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 EMQQ The Emerging, you can compare the effects of market volatilities on IShares Core and EMQQ Emerging 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 EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and EMQQ Emerging.

Diversification Opportunities for IShares Core and EMQQ Emerging

0.91

Correlation Coefficient

IShares Core  EMQQ Emerging

Almost no diversification

The 3 months correlation between IShares and EMQQ is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging 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 EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of IShares Core i.e., IShares Core and EMQQ Emerging go up and down completely randomly.

Pair Corralation between IShares Core and EMQQ Emerging

Given the investment horizon of 90 days IShares Core is expected to generate 2.76 times less return on investment than EMQQ Emerging. But when comparing it to its historical volatility, iShares Core MSCI is 1.62 times less risky than EMQQ Emerging. It trades about 0.04 of its potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,843  in EMQQ The Emerging on December 25, 2024 and sell it today you would earn a total of  85.00  from holding EMQQ The Emerging or generate 2.21% return on investment over 90 days.

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

iShares Core MSCI  vs.  EMQQ The Emerging

iShares Core MSCI

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IShares Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EMQQ The Emerging

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMQQ The Emerging are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EMQQ Emerging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IShares Core and EMQQ Emerging

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

The idea behind iShares Core MSCI and EMQQ The Emerging 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.