Correlation Between IShares MSCI and Rite Aid
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Rite Aid 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 Rite Aid 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 Rite Aid, you can compare the effects of market volatilities on IShares MSCI and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Rite Aid.
Diversification Opportunities for IShares MSCI and Rite Aid
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Rite is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of IShares MSCI i.e., IShares MSCI and Rite Aid go up and down completely randomly.
Pair Corralation between IShares MSCI and Rite Aid
Given the investment horizon of 90 days iShares MSCI China is expected to generate 0.14 times more return on investment than Rite Aid. However, iShares MSCI China is 7.27 times less risky than Rite Aid. It trades about -0.02 of its potential returns per unit of risk. Rite Aid is currently generating about -0.06 per unit of risk. If you would invest 4,595 in iShares MSCI China on January 26, 2024 and sell it today you would lose (461.00) from holding iShares MSCI China or give up 10.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.92% |
| Values | Daily Returns |
iShares MSCI China vs. Rite Aid
Performance |
| Timeline |
| iShares MSCI China |
| Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares MSCI and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Rite Aid
The main advantage of trading using opposite IShares MSCI and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid's long position.| IShares MSCI vs. iShares MSCI India | IShares MSCI vs. HUMANA INC | IShares MSCI vs. Aquagold International | IShares MSCI vs. Morningstar Unconstrained Allocation |
| Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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