Correlation Between IShares MSCI and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Verizon Communications 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 Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI EAFE and Verizon Communications, you can compare the effects of market volatilities on IShares MSCI and Verizon Communications 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 Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Verizon Communications.
Diversification Opportunities for IShares MSCI and Verizon Communications
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and Verizon is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 EAFE are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of IShares MSCI i.e., IShares MSCI and Verizon Communications go up and down completely randomly.
Pair Corralation between IShares MSCI and Verizon Communications
Considering the 90-day investment horizon iShares MSCI EAFE is expected to under-perform the Verizon Communications. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI EAFE is 1.9 times less risky than Verizon Communications. The etf trades about -0.15 of its potential returns per unit of risk. The Verizon Communications is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,022 in Verizon Communications on January 25, 2024 and sell it today you would lose (73.00) from holding Verizon Communications or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI EAFE vs. Verizon Communications
Performance |
| Timeline |
| iShares MSCI EAFE |
| Verizon Communications |
IShares MSCI and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Verizon Communications
The main advantage of trading using opposite IShares MSCI and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| IShares MSCI vs. iShares MSCI China | IShares MSCI vs. iShares Dividend and | IShares MSCI vs. iShares MSCI Frontier | IShares MSCI vs. iShares Short Maturity |
| Verizon Communications vs. T Mobile | Verizon Communications vs. Lumen Technologies | Verizon Communications vs. Comcast Corp | Verizon Communications vs. ATT Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |