Correlation Between IShares MSCI and WisdomTree Ethereum

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

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

Diversification Opportunities for IShares MSCI and WisdomTree Ethereum

0.59

Correlation Coefficient

IShares MSCI  WisdomTree Ethereum

Very weak diversification

The 3 months correlation between IShares and WisdomTree is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI World and WisdomTree Ethereum ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Ethereum ETC 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 World are associated (or correlated) with WisdomTree Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Ethereum ETC has no effect on the direction of IShares MSCI i.e., IShares MSCI and WisdomTree Ethereum go up and down completely randomly.

Pair Corralation between IShares MSCI and WisdomTree Ethereum

Assuming the 90 days trading horizon iShares MSCI World is expected to generate 0.17 times more return on investment than WisdomTree Ethereum. However, iShares MSCI World is 5.74 times less risky than WisdomTree Ethereum. It trades about -0.08 of its potential returns per unit of risk. WisdomTree Ethereum ETC is currently generating about -0.13 per unit of risk. If you would invest  7,605  in iShares MSCI World on December 23, 2024 and sell it today you would lose (366.00) from holding iShares MSCI World or give up 4.81% of portfolio value over 90 days.

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

iShares MSCI World  vs.  WisdomTree Ethereum ETC

iShares MSCI World

Risk-Adjusted Performance

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 comparatively stable basic indicators, IShares MSCI is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

WisdomTree Ethereum ETC

Risk-Adjusted Performance

Very Weak

Over the last 90 days WisdomTree Ethereum ETC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with IShares MSCI and WisdomTree Ethereum

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

The idea behind iShares MSCI World and WisdomTree Ethereum ETC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.