Correlation Between Vastned Retail and IShares MSCI

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

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

Diversification Opportunities for Vastned Retail and IShares MSCI

-0.1

Correlation Coefficient

Vastned Retail  IShares MSCI

Good diversification

The 3 months correlation between Vastned and IShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV 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 Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and IShares MSCI go up and down completely randomly.

Pair Corralation between Vastned Retail and IShares MSCI

Assuming the 90 days trading horizon Vastned Retail NV is expected to under-perform the IShares MSCI. In addition to that, Vastned Retail is 1.77 times more volatile than iShares MSCI USA. It trades about -0.08 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about 0.14 per unit of volatility. If you would invest  1,062  in iShares MSCI USA on September 20, 2024 and sell it today you would earn a total of  62.00  from holding iShares MSCI USA or generate 5.84% return on investment over 90 days.

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

Vastned Retail NV  vs.  iShares MSCI USA

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vastned Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares MSCI USA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 11 (%) 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 Vastned Retail and IShares MSCI

The main advantage of trading using opposite Vastned Retail and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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 Vastned Retail NV 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.