Correlation Between IShares MSCI and VanEck Solana

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

Diversification Opportunities for IShares MSCI and VanEck Solana

0.7

Correlation Coefficient

IShares MSCI  VanEck Solana

Poor diversification

The 3 months correlation between IShares and VanEck is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI World and VanEck Solana ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Solana ETN 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 VanEck Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Solana ETN has no effect on the direction of IShares MSCI i.e., IShares MSCI and VanEck Solana go up and down completely randomly.

Pair Corralation between IShares MSCI and VanEck Solana

Assuming the 90 days trading horizon iShares MSCI World is expected to generate 0.15 times more return on investment than VanEck Solana. However, iShares MSCI World is 6.68 times less risky than VanEck Solana. It trades about -0.08 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about -0.06 per unit of risk. If you would invest  7,605  in iShares MSCI World on December 22, 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	Significant
Accuracy	100.0%
Values	Daily Returns

iShares MSCI World  vs.  VanEck Solana ETN

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.

VanEck Solana ETN

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Solana ETN 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 VanEck Solana

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

The idea behind iShares MSCI World and VanEck Solana ETN 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.