Correlation Between Global X and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X FTSE and iShares MSCI Spain, you can compare the effects of market volatilities on Global X 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 Global X with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares MSCI.
Diversification Opportunities for Global X and IShares MSCI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and IShares is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Global X FTSE and iShares MSCI Spain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Spain and Global X 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 Global X FTSE 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 Spain has no effect on the direction of Global X i.e., Global X and IShares MSCI go up and down completely randomly.
Pair Corralation between Global X and IShares MSCI
Given the investment horizon of 90 days Global X FTSE is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, Global X FTSE is 1.23 times less risky than IShares MSCI. The etf trades about -0.01 of its potential returns per unit of risk. The iShares MSCI Spain is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,972 in iShares MSCI Spain on February 23, 2024 and sell it today you would earn a total of 352.50 from holding iShares MSCI Spain or generate 11.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global X FTSE vs. iShares MSCI Spain
Performance |
Timeline |
Global X FTSE |
iShares MSCI Spain |
Global X and IShares MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and IShares MSCI
The main advantage of trading using opposite Global X and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.Global X vs. American Financial Group | Global X vs. Maiden Holdings North | Global X vs. Entergy New Orleans | Global X vs. Newtek Business Services |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |