Correlation Between IShares Consumer and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Consumer and Fidelity 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 IShares Consumer and Fidelity MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Consumer Staples and Fidelity MSCI Consumer, you can compare the effects of market volatilities on IShares Consumer and Fidelity 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 IShares Consumer with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Consumer and Fidelity MSCI.
Diversification Opportunities for IShares Consumer and Fidelity MSCI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Fidelity is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Staples and Fidelity MSCI Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Consumer and IShares Consumer 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 Consumer Staples are associated (or correlated) with Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Consumer has no effect on the direction of IShares Consumer i.e., IShares Consumer and Fidelity MSCI go up and down completely randomly.
Pair Corralation between IShares Consumer and Fidelity MSCI
Considering the 90-day investment horizon iShares Consumer Staples is expected to generate 1.12 times more return on investment than Fidelity MSCI. However, IShares Consumer is 1.12 times more volatile than Fidelity MSCI Consumer. It trades about 0.02 of its potential returns per unit of risk. Fidelity MSCI Consumer is currently generating about -0.01 per unit of risk. If you would invest 6,671 in iShares Consumer Staples on February 2, 2024 and sell it today you would earn a total of 17.00 from holding iShares Consumer Staples or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Consumer Staples vs. Fidelity MSCI Consumer
Performance |
Timeline |
iShares Consumer Staples |
Fidelity MSCI Consumer |
IShares Consumer and Fidelity MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Consumer and Fidelity MSCI
The main advantage of trading using opposite IShares Consumer and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Consumer position performs unexpectedly, Fidelity 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 Fidelity MSCI will offset losses from the drop in Fidelity MSCI's long position.IShares Consumer vs. Vanguard Consumer Discretionary | IShares Consumer vs. Vanguard Utilities Index | IShares Consumer vs. Vanguard Industrials Index | IShares Consumer vs. Vanguard Materials Index |
Fidelity MSCI vs. Vanguard Consumer Discretionary | Fidelity MSCI vs. Vanguard Utilities Index | Fidelity MSCI vs. Vanguard Industrials Index | Fidelity MSCI vs. Vanguard Materials Index |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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