Correlation Between IShares MSCI and Libero Copper

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

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

Diversification Opportunities for IShares MSCI and Libero Copper

-0.49

Correlation Coefficient

IShares MSCI  Libero Copper

Very good diversification

The 3 months correlation between IShares and Libero is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI and Libero Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Gold 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 are associated (or correlated) with Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Gold has no effect on the direction of IShares MSCI i.e., IShares MSCI and Libero Copper go up and down completely randomly.

Pair Corralation between IShares MSCI and Libero Copper

Assuming the 90 days horizon iShares MSCI is expected to generate 0.11 times more return on investment than Libero Copper. However, iShares MSCI is 9.49 times less risky than Libero Copper. It trades about 0.13 of its potential returns per unit of risk. Libero Copper Gold is currently generating about -0.04 per unit of risk. If you would invest  37.00  in iShares MSCI on October 23, 2024 and sell it today you would earn a total of  2.00  from holding iShares MSCI or generate 5.41% return on investment over 90 days.

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

iShares MSCI  vs.  Libero Copper Gold

iShares MSCI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IShares MSCI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Libero Copper Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Libero Copper Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IShares MSCI and Libero Copper

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

The idea behind iShares MSCI and Libero Copper Gold 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.