Correlation Between Ishares Msci and Vinci Logistica

Can any of the company-specific risk be diversified away by investing in both Ishares Msci and Vinci Logistica 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 Vinci Logistica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ishares Msci Brazil and Vinci Logistica Fundo, you can compare the effects of market volatilities on Ishares Msci and Vinci Logistica 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 Vinci Logistica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Msci and Vinci Logistica.

Diversification Opportunities for Ishares Msci and Vinci Logistica

-0.71

Correlation Coefficient

Ishares Msci  Vinci Logistica

Pay attention - limited upside

The 3 months correlation between Ishares and Vinci is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Msci Brazil and Vinci Logistica Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci Logistica Fundo 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 Brazil are associated (or correlated) with Vinci Logistica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci Logistica Fundo has no effect on the direction of Ishares Msci i.e., Ishares Msci and Vinci Logistica go up and down completely randomly.

Pair Corralation between Ishares Msci and Vinci Logistica

Assuming the 90 days trading horizon Ishares Msci Brazil is expected to under-perform the Vinci Logistica. In addition to that, Ishares Msci is 1.19 times more volatile than Vinci Logistica Fundo. It trades about -0.23 of its total potential returns per unit of risk. Vinci Logistica Fundo is currently generating about -0.15 per unit of volatility. If you would invest  8,548  in Vinci Logistica Fundo on September 3, 2024 and sell it today you would lose (822.00) from holding Vinci Logistica Fundo or give up 9.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	36.51%
Values	Daily Returns

Ishares Msci Brazil  vs.  Vinci Logistica Fundo

Ishares Msci Brazil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ishares Msci Brazil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Vinci Logistica Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci Logistica Fundo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Ishares Msci and Vinci Logistica

The main advantage of trading using opposite Ishares Msci and Vinci Logistica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Msci position performs unexpectedly, Vinci Logistica 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 Vinci Logistica will offset losses from the drop in Vinci Logistica's long position.

The idea behind Ishares Msci Brazil and Vinci Logistica Fundo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..