Correlation Between IShares MSCI and Kendrion

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

Diversification Opportunities for IShares MSCI and Kendrion

-0.77

Correlation Coefficient

IShares MSCI  Kendrion

Pay attention - limited upside

The 3 months correlation between IShares and Kendrion is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV 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 Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of IShares MSCI i.e., IShares MSCI and Kendrion go up and down completely randomly.

Pair Corralation between IShares MSCI and Kendrion

Assuming the 90 days trading horizon iShares MSCI USA is expected to generate 0.44 times more return on investment than Kendrion. However, iShares MSCI USA is 2.28 times less risky than Kendrion. It trades about 0.12 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.07 per unit of risk. If you would invest  1,085  in iShares MSCI USA on September 16, 2024 and sell it today you would earn a total of  39.00  from holding iShares MSCI USA or generate 3.59% return on investment over 90 days.

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

iShares MSCI USA  vs.  Kendrion NV

iShares MSCI USA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares MSCI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with IShares MSCI and Kendrion

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

The idea behind iShares MSCI USA and Kendrion NV 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..