Correlation Between IShares MSCI and 1inch

Can any of the company-specific risk be diversified away by investing in both IShares MSCI and 1inch 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 1inch 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 1inch, you can compare the effects of market volatilities on IShares MSCI and 1inch 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 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and 1inch.

Diversification Opportunities for IShares MSCI and 1inch

0.79

Correlation Coefficient

IShares MSCI  1inch

Poor diversification

The 3 months correlation between IShares and 1inch is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Ireland and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch 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 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of IShares MSCI i.e., IShares MSCI and 1inch go up and down completely randomly.

Pair Corralation between IShares MSCI and 1inch

Given the investment horizon of 90 days iShares MSCI Ireland is expected to generate 0.16 times more return on investment than 1inch. However, iShares MSCI Ireland is 6.1 times less risky than 1inch. It trades about -0.11 of its potential returns per unit of risk. 1inch is currently generating about -0.22 per unit of risk. If you would invest  6,846  in iShares MSCI Ireland on January 24, 2024 and sell it today you would lose (166.00) from holding iShares MSCI Ireland or give up 2.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

iShares MSCI Ireland  vs.  1inch

iShares MSCI Ireland

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Ireland are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in May 2024.

1inch

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 1inch are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, 1inch exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares MSCI and 1inch

The main advantage of trading using opposite IShares MSCI and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.

The idea behind iShares MSCI Ireland and 1inch 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.