Correlation Between IShares MSCI and ETFis Series

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

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

Diversification Opportunities for IShares MSCI and ETFis Series

-0.51

Correlation Coefficient

IShares MSCI  ETFis Series

Excellent diversification

The 3 months correlation between IShares and ETFis is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Turkey and ETFis Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFis Series Trust 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 Turkey are associated (or correlated) with ETFis Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFis Series Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and ETFis Series go up and down completely randomly.

Pair Corralation between IShares MSCI and ETFis Series

Considering the 90-day investment horizon iShares MSCI Turkey is expected to under-perform the ETFis Series. In addition to that, IShares MSCI is 3.21 times more volatile than ETFis Series Trust. It trades about -0.02 of its total potential returns per unit of risk. ETFis Series Trust is currently generating about 0.09 per unit of volatility. If you would invest  1,868  in ETFis Series Trust on September 4, 2024 and sell it today you would earn a total of  50.00  from holding ETFis Series Trust or generate 2.68% 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 Turkey  vs.  ETFis Series Trust

iShares MSCI Turkey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Turkey has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ETFis Series Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ETFis Series Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, ETFis Series is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IShares MSCI and ETFis Series

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

The idea behind iShares MSCI Turkey and ETFis Series Trust 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.