Correlation Between IShares MSCI and PGAL

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

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

Diversification Opportunities for IShares MSCI and PGAL

-0.52

Correlation Coefficient

IShares MSCI  PGAL

Excellent diversification

The 3 months correlation between IShares and PGAL is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Ireland and PGAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGAL 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 Ireland are associated (or correlated) with PGAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGAL has no effect on the direction of IShares MSCI i.e., IShares MSCI and PGAL go up and down completely randomly.

Pair Corralation between IShares MSCI and PGAL

If you would invest  1,032  in PGAL on February 1, 2024 and sell it today you would earn a total of  0.00  from holding PGAL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

iShares MSCI Ireland  vs.  PGAL

iShares MSCI Ireland

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Ireland are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PGAL

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days PGAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PGAL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares MSCI and PGAL

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

The idea behind iShares MSCI Ireland and PGAL 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.