Correlation Between Van Eck and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Van Eck and IShares MSCI 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 Van Eck and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Van Eck and iShares MSCI South, you can compare the effects of market volatilities on Van Eck and IShares MSCI 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 Van Eck with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van Eck and IShares MSCI.
Diversification Opportunities for Van Eck and IShares MSCI
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Van and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Van Eck and iShares MSCI South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI South and Van Eck 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 Van Eck are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI South has no effect on the direction of Van Eck i.e., Van Eck and IShares MSCI go up and down completely randomly.
Pair Corralation between Van Eck and IShares MSCI
Considering the 90-day investment horizon Van Eck is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, Van Eck is 13.28 times less risky than IShares MSCI. The etf trades about -0.07 of its potential returns per unit of risk. The iShares MSCI South is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,438 in iShares MSCI South on January 20, 2024 and sell it today you would lose (306.00) from holding iShares MSCI South or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 12.93% |
| Values | Daily Returns |
Van Eck vs. iShares MSCI South
Performance |
| Timeline |
| Van Eck |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares MSCI South |
Van Eck and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Van Eck and IShares MSCI
The main advantage of trading using opposite Van Eck and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Van Eck position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.The idea behind Van Eck and iShares MSCI South 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.| IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Mexico | IShares MSCI vs. iShares MSCI Hong |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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