Correlation Between IShares Core and Xtrackers SLI
Can any of the company-specific risk be diversified away by investing in both IShares Core and Xtrackers SLI 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 Core and Xtrackers SLI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Xtrackers SLI UCITS, you can compare the effects of market volatilities on IShares Core and Xtrackers SLI 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 Core with a short position of Xtrackers SLI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Xtrackers SLI.
Diversification Opportunities for IShares Core and Xtrackers SLI
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Xtrackers is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Xtrackers SLI UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers SLI UCITS and IShares Core 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 Core MSCI are associated (or correlated) with Xtrackers SLI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers SLI UCITS has no effect on the direction of IShares Core i.e., IShares Core and Xtrackers SLI go up and down completely randomly.
Pair Corralation between IShares Core and Xtrackers SLI
Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 1.18 times more return on investment than Xtrackers SLI. However, IShares Core is 1.18 times more volatile than Xtrackers SLI UCITS. It trades about -0.02 of its potential returns per unit of risk. Xtrackers SLI UCITS is currently generating about -0.1 per unit of risk. If you would invest 3,278 in iShares Core MSCI on January 29, 2024 and sell it today you would lose (16.00) from holding iShares Core MSCI or give up 0.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 90.0% |
Values | Daily Returns |
iShares Core MSCI vs. Xtrackers SLI UCITS
Performance |
Timeline |
iShares Core MSCI |
Xtrackers SLI UCITS |
IShares Core and Xtrackers SLI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and Xtrackers SLI
The main advantage of trading using opposite IShares Core and Xtrackers SLI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Xtrackers SLI 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 Xtrackers SLI will offset losses from the drop in Xtrackers SLI's long position.IShares Core vs. iShares Corp Bond | IShares Core vs. iShares Emerging Asia | IShares Core vs. iShares Corp Bond | IShares Core vs. iShares MSCI Global |
Xtrackers SLI vs. Xtrackers MSCI USA | Xtrackers SLI vs. Xtrackers USD Corporate | Xtrackers SLI vs. Xtrackers MSCI AC | Xtrackers SLI vs. Xtrackers MSCI World |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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