Correlation Between IShares MSCI and QSY
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and QSY 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 QSY 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 QSY, you can compare the effects of market volatilities on IShares MSCI and QSY 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 QSY. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and QSY.
Diversification Opportunities for IShares MSCI and QSY
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and QSY is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding IShares MSCI EAFE and QSY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QSY 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 QSY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QSY has no effect on the direction of IShares MSCI i.e., IShares MSCI and QSY go up and down completely randomly.
Pair Corralation between IShares MSCI and QSY
Considering the 90-day investment horizon IShares MSCI EAFE is expected to generate 0.72 times more return on investment than QSY. However, IShares MSCI EAFE is 1.39 times less risky than QSY. It trades about 0.01 of its potential returns per unit of risk. QSY is currently generating about -0.01 per unit of risk. If you would invest 6,137 in IShares MSCI EAFE on December 30, 2023 and sell it today you would earn a total of 196.00 from holding IShares MSCI EAFE or generate 3.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 30.77% |
Values | Daily Returns |
IShares MSCI EAFE vs. QSY
Performance |
Timeline |
IShares MSCI EAFE |
QSY |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
IShares MSCI and QSY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares MSCI and QSY
The main advantage of trading using opposite IShares MSCI and QSY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, QSY 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 QSY will offset losses from the drop in QSY's long position.IShares MSCI vs. SPDR SP International | IShares MSCI vs. Dimensional ETF Trust | IShares MSCI vs. Schwab US Dividend | IShares MSCI vs. Vanguard Russell 2000 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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