Correlation Between Quest For and IShares MSCI

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

By analyzing existing cross correlation between Quest For Growth and iShares MSCI USA, you can compare the effects of market volatilities on Quest For 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 Quest For with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quest For and IShares MSCI.

Diversification Opportunities for Quest For and IShares MSCI

-0.86

Correlation Coefficient

Quest For  IShares MSCI

Pay attention - limited upside

The 3 months correlation between Quest and IShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Quest For Growth and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and Quest For 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 Quest For Growth 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 USA has no effect on the direction of Quest For i.e., Quest For and IShares MSCI go up and down completely randomly.

Pair Corralation between Quest For and IShares MSCI

Assuming the 90 days trading horizon Quest For Growth is expected to generate 1.16 times more return on investment than IShares MSCI. However, Quest For is 1.16 times more volatile than iShares MSCI USA. It trades about -0.03 of its potential returns per unit of risk. iShares MSCI USA is currently generating about -0.14 per unit of risk. If you would invest  393.00  in Quest For Growth on September 22, 2024 and sell it today you would lose (3.00) from holding Quest For Growth or give up 0.76% of portfolio value over 90 days.

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

Quest For Growth  vs.  iShares MSCI USA

Quest For Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quest For Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

iShares MSCI USA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares MSCI is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Quest For and IShares MSCI

The main advantage of trading using opposite Quest For and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quest For 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.

The idea behind Quest For Growth and iShares MSCI USA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.