Correlation Between IShares MSCI and Tuttle Capital

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

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

Diversification Opportunities for IShares MSCI and Tuttle Capital

0.62

Correlation Coefficient

IShares MSCI  Tuttle Capital

Poor diversification

The 3 months correlation between IShares and Tuttle is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Tuttle Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Management 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 USA are associated (or correlated) with Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Management has no effect on the direction of IShares MSCI i.e., IShares MSCI and Tuttle Capital go up and down completely randomly.

Pair Corralation between IShares MSCI and Tuttle Capital

If you would invest  14,130  in iShares MSCI USA on October 5, 2024 and sell it today you would earn a total of  6,996  from holding iShares MSCI USA or generate 49.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.65%
Values	Daily Returns

iShares MSCI USA  vs.  Tuttle Capital Management

iShares MSCI USA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Tuttle Capital Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tuttle Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Tuttle Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares MSCI and Tuttle Capital

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

The idea behind iShares MSCI USA and Tuttle Capital Management 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.