Correlation Between IShares MSCI and OneAscent Emerging

Can any of the company-specific risk be diversified away by investing in both IShares MSCI and OneAscent Emerging 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 OneAscent Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares MSCI Emerging and OneAscent Emerging Markets, you can compare the effects of market volatilities on IShares MSCI and OneAscent Emerging 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 OneAscent Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and OneAscent Emerging.

Diversification Opportunities for IShares MSCI and OneAscent Emerging

0.89

Correlation Coefficient

IShares MSCI  OneAscent Emerging

Very poor diversification

The 3 months correlation between IShares and OneAscent is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and OneAscent Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneAscent Emerging 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 Emerging are associated (or correlated) with OneAscent Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneAscent Emerging has no effect on the direction of IShares MSCI i.e., IShares MSCI and OneAscent Emerging go up and down completely randomly.

Pair Corralation between IShares MSCI and OneAscent Emerging

Considering the 90-day investment horizon iShares MSCI Emerging is expected to generate 1.17 times more return on investment than OneAscent Emerging. However, IShares MSCI is 1.17 times more volatile than OneAscent Emerging Markets. It trades about 0.0 of its potential returns per unit of risk. OneAscent Emerging Markets is currently generating about -0.04 per unit of risk. If you would invest  4,337  in iShares MSCI Emerging on August 30, 2024 and sell it today you would lose (18.00) from holding iShares MSCI Emerging or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

iShares MSCI Emerging  vs.  OneAscent Emerging Markets

iShares MSCI Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, IShares MSCI is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

OneAscent Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OneAscent Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, OneAscent Emerging is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares MSCI and OneAscent Emerging

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

The idea behind iShares MSCI Emerging and OneAscent Emerging Markets 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.