Correlation Between IShares MSCI and Twitter

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

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

Diversification Opportunities for IShares MSCI and Twitter

-0.71

Correlation Coefficient

IShares MSCI  Twitter

Pay attention - limited upside

The 3 months correlation between IShares and Twitter is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Brazil and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Brazil are associated (or correlated) with Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of IShares MSCI i.e., IShares MSCI and Twitter go up and down completely randomly.

Pair Corralation between IShares MSCI and Twitter

If you would invest  3,064  in iShares MSCI Brazil on January 24, 2024 and sell it today you would earn a total of  10.00  from holding iShares MSCI Brazil or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.48%
Values	Daily Returns

iShares MSCI Brazil  vs.  Twitter

iShares MSCI Brazil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Brazil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Twitter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter 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 Twitter

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

The idea behind iShares MSCI Brazil and Twitter 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.