Correlation Between ETRACS 2xMonthly and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both ETRACS 2xMonthly 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 ETRACS 2xMonthly and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS 2xMonthly Pay and iShares MSCI Intl, you can compare the effects of market volatilities on ETRACS 2xMonthly 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 ETRACS 2xMonthly with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS 2xMonthly and IShares MSCI.
Diversification Opportunities for ETRACS 2xMonthly and IShares MSCI
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETRACS and IShares is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS 2xMonthly Pay and iShares MSCI Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Intl and ETRACS 2xMonthly 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 ETRACS 2xMonthly Pay 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 Intl has no effect on the direction of ETRACS 2xMonthly i.e., ETRACS 2xMonthly and IShares MSCI go up and down completely randomly.
Pair Corralation between ETRACS 2xMonthly and IShares MSCI
Given the investment horizon of 90 days ETRACS 2xMonthly Pay is expected to under-perform the IShares MSCI. In addition to that, ETRACS 2xMonthly is 1.57 times more volatile than iShares MSCI Intl. It trades about -0.07 of its total potential returns per unit of risk. iShares MSCI Intl is currently generating about 0.02 per unit of volatility. If you would invest 4,090 in iShares MSCI Intl on September 6, 2025 and sell it today you would earn a total of 30.00 from holding iShares MSCI Intl or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETRACS 2xMonthly Pay vs. iShares MSCI Intl
Performance |
| Timeline |
| ETRACS 2xMonthly Pay |
| iShares MSCI Intl |
ETRACS 2xMonthly and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS 2xMonthly and IShares MSCI
The main advantage of trading using opposite ETRACS 2xMonthly and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS 2xMonthly 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.| ETRACS 2xMonthly vs. Strategy Shares | ETRACS 2xMonthly vs. Freedom Day Dividend | ETRACS 2xMonthly vs. Franklin Templeton ETF | ETRACS 2xMonthly vs. iShares MSCI China |
| IShares MSCI vs. FT Vest Equity | IShares MSCI vs. Northern Lights | IShares MSCI vs. Diamond Hill Funds | IShares MSCI vs. Dimensional International High |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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