Correlation Between EGPT and IShares MSCI

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

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

Diversification Opportunities for EGPT and IShares MSCI

0.16

Correlation Coefficient

EGPT  IShares MSCI

Average diversification

The 3 months correlation between EGPT and IShares is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding EGPT and iShares MSCI Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Chile and EGPT 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 EGPT 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 Chile has no effect on the direction of EGPT i.e., EGPT and IShares MSCI go up and down completely randomly.

Pair Corralation between EGPT and IShares MSCI

If you would invest  2,619  in iShares MSCI Chile on February 14, 2024 and sell it today you would earn a total of  221.00  from holding iShares MSCI Chile or generate 8.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

EGPT  vs.  iShares MSCI Chile

EGPT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EGPT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

iShares MSCI Chile

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Chile are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, IShares MSCI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EGPT and IShares MSCI

The main advantage of trading using opposite EGPT and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGPT 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 EGPT and iShares MSCI Chile 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.