Correlation Between IShares MSCI and 21Shares Staking

Can any of the company-specific risk be diversified away by investing in both IShares MSCI and 21Shares Staking 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 21Shares Staking 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 21Shares Staking Basket, you can compare the effects of market volatilities on IShares MSCI and 21Shares Staking 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 21Shares Staking. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and 21Shares Staking.

Diversification Opportunities for IShares MSCI and 21Shares Staking

0.88

Correlation Coefficient

IShares MSCI  21Shares Staking

Very poor diversification

The 3 months correlation between IShares and 21Shares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI World and 21Shares Staking Basket in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Staking Basket 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 21Shares Staking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Staking Basket has no effect on the direction of IShares MSCI i.e., IShares MSCI and 21Shares Staking go up and down completely randomly.

Pair Corralation between IShares MSCI and 21Shares Staking

Assuming the 90 days trading horizon iShares MSCI World is expected to generate 0.7 times more return on investment than 21Shares Staking. However, iShares MSCI World is 1.43 times less risky than 21Shares Staking. It trades about 0.18 of its potential returns per unit of risk. 21Shares Staking Basket is currently generating about -0.3 per unit of risk. If you would invest  7,658  in iShares MSCI World on October 27, 2024 and sell it today you would earn a total of  178.00  from holding iShares MSCI World or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

iShares MSCI World  vs.  21Shares Staking Basket

iShares MSCI World

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI World are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

21Shares Staking Basket

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Staking Basket are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, 21Shares Staking sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares MSCI and 21Shares Staking

The main advantage of trading using opposite IShares MSCI and 21Shares Staking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, 21Shares Staking 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 21Shares Staking will offset losses from the drop in 21Shares Staking's long position.

The idea behind iShares MSCI World and 21Shares Staking Basket 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.