Correlation Between IShares MSCI and KPOP

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

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

Diversification Opportunities for IShares MSCI and KPOP

-0.47

Correlation Coefficient

IShares MSCI  KPOP

Very good diversification

The 3 months correlation between IShares and KPOP is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI France and KPOP and Korean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPOP and Korean 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 France are associated (or correlated) with KPOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPOP and Korean has no effect on the direction of IShares MSCI i.e., IShares MSCI and KPOP go up and down completely randomly.

Pair Corralation between IShares MSCI and KPOP

Considering the 90-day investment horizon iShares MSCI France is expected to under-perform the KPOP. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI France is 1.72 times less risky than KPOP. The etf trades about -0.11 of its potential returns per unit of risk. The KPOP and Korean is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,240  in KPOP and Korean on September 2, 2024 and sell it today you would earn a total of  250.00  from holding KPOP and Korean or generate 20.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iShares MSCI France  vs.  KPOP and Korean

iShares MSCI France

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI France has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

KPOP and Korean

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KPOP and Korean are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KPOP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares MSCI and KPOP

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

The idea behind iShares MSCI France and KPOP and Korean 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.