Correlation Between IShares MSCI and Return Stacked

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

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

Diversification Opportunities for IShares MSCI and Return Stacked

-0.49

Correlation Coefficient

IShares MSCI  Return Stacked

Very good diversification

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

Pair Corralation between IShares MSCI and Return Stacked

Given the investment horizon of 90 days iShares MSCI China is expected to under-perform the Return Stacked. In addition to that, IShares MSCI is 4.29 times more volatile than Return Stacked Bonds. It trades about 0.0 of its total potential returns per unit of risk. Return Stacked Bonds is currently generating about 0.14 per unit of volatility. If you would invest  1,845  in Return Stacked Bonds on September 12, 2024 and sell it today you would earn a total of  30.00  from holding Return Stacked Bonds or generate 1.63% 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 China  vs.  Return Stacked Bonds

iShares MSCI China

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI China are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, IShares MSCI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Return Stacked Bonds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Return Stacked Bonds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with IShares MSCI and Return Stacked

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

The idea behind iShares MSCI China and Return Stacked Bonds 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.