Correlation Between Vanguard Utilities and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Vanguard Utilities 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 Vanguard Utilities and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Utilities Index and iShares MSCI EAFE, you can compare the effects of market volatilities on Vanguard Utilities 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 Vanguard Utilities with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Utilities and IShares MSCI.
Diversification Opportunities for Vanguard Utilities and IShares MSCI
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and IShares is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Utilities Index and iShares MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI EAFE and Vanguard Utilities 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 Vanguard Utilities Index 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 EAFE has no effect on the direction of Vanguard Utilities i.e., Vanguard Utilities and IShares MSCI go up and down completely randomly.
Pair Corralation between Vanguard Utilities and IShares MSCI
Assuming the 90 days horizon Vanguard Utilities Index is expected to generate 1.12 times more return on investment than IShares MSCI. However, Vanguard Utilities is 1.12 times more volatile than iShares MSCI EAFE. It trades about 0.11 of its potential returns per unit of risk. iShares MSCI EAFE is currently generating about 0.05 per unit of risk. If you would invest 9,259 in Vanguard Utilities Index on August 14, 2025 and sell it today you would earn a total of 491.00 from holding Vanguard Utilities Index or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Utilities Index vs. iShares MSCI EAFE
Performance |
| Timeline |
| Vanguard Utilities Index |
| iShares MSCI EAFE |
Vanguard Utilities and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Utilities and IShares MSCI
The main advantage of trading using opposite Vanguard Utilities and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Utilities 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.| Vanguard Utilities vs. Vanguard Utilities Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Energy Index | Vanguard Utilities vs. Vanguard Consumer Staples |
| IShares MSCI vs. iShares ESG Aware | IShares MSCI vs. iShares Core High | IShares MSCI vs. Alerian MLP ETF | IShares MSCI vs. iShares MSCI EAFE |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |