Correlation Between IShares MSCI and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 MSCI 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 MSCI USA and Fidelity MSCI Financials, you can compare the effects of market volatilities on IShares MSCI 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 MSCI with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Fidelity MSCI.
Diversification Opportunities for IShares MSCI and Fidelity MSCI
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Fidelity is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Fidelity MSCI Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Financials 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 USA 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 Financials has no effect on the direction of IShares MSCI i.e., IShares MSCI and Fidelity MSCI go up and down completely randomly.
Pair Corralation between IShares MSCI and Fidelity MSCI
Given the investment horizon of 90 days iShares MSCI USA is expected to generate 1.25 times more return on investment than Fidelity MSCI. However, IShares MSCI is 1.25 times more volatile than Fidelity MSCI Financials. It trades about 0.09 of its potential returns per unit of risk. Fidelity MSCI Financials is currently generating about 0.05 per unit of risk. If you would invest 7,042 in iShares MSCI USA on August 15, 2025 and sell it today you would earn a total of 419.00 from holding iShares MSCI USA or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI USA vs. Fidelity MSCI Financials
Performance |
| Timeline |
| iShares MSCI USA |
| Fidelity MSCI Financials |
IShares MSCI and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Fidelity MSCI
The main advantage of trading using opposite IShares MSCI and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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 MSCI vs. iShares Edge MSCI | IShares MSCI vs. Fidelity MSCI Financials | IShares MSCI vs. SPDR SP 400 | IShares MSCI vs. iShares Edge MSCI |
| Fidelity MSCI vs. Fidelity MSCI Health | Fidelity MSCI vs. Fidelity MSCI Utilities | Fidelity MSCI vs. Fidelity MSCI Consumer | Fidelity MSCI vs. iShares MSCI USA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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