Correlation Between IShares MSCI and SmartETFs Smart
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and SmartETFs Smart 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 SmartETFs Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Global and SmartETFs Smart Transportation, you can compare the effects of market volatilities on IShares MSCI and SmartETFs Smart 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 SmartETFs Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and SmartETFs Smart.
Diversification Opportunities for IShares MSCI and SmartETFs Smart
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SmartETFs is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and SmartETFs Smart Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Smart Tran 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 Global are associated (or correlated) with SmartETFs Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Smart Tran has no effect on the direction of IShares MSCI i.e., IShares MSCI and SmartETFs Smart go up and down completely randomly.
Pair Corralation between IShares MSCI and SmartETFs Smart
Given the investment horizon of 90 days IShares MSCI is expected to generate 3.53 times less return on investment than SmartETFs Smart. But when comparing it to its historical volatility, iShares MSCI Global is 2.29 times less risky than SmartETFs Smart. It trades about 0.05 of its potential returns per unit of risk. SmartETFs Smart Transportation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,114 in SmartETFs Smart Transportation on March 10, 2025 and sell it today you would earn a total of 416.00 from holding SmartETFs Smart Transportation or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Global vs. SmartETFs Smart Transportation
Performance |
| Timeline |
| iShares MSCI Global |
| SmartETFs Smart Tran |
IShares MSCI and SmartETFs Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and SmartETFs Smart
The main advantage of trading using opposite IShares MSCI and SmartETFs Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, SmartETFs Smart 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 SmartETFs Smart will offset losses from the drop in SmartETFs Smart's long position.| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
| SmartETFs Smart vs. SPDR SP Kensho | SmartETFs Smart vs. KraneShares Electric Vehicles | SmartETFs Smart vs. iShares Self Driving EV | SmartETFs Smart vs. SPDR SP Kensho |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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