Correlation Between IShares MSCI and FINU

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

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

Diversification Opportunities for IShares MSCI and FINU

0.0

Correlation Coefficient

IShares MSCI  FINU

Pay attention - limited upside

The 3 months correlation between IShares and FINU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and FINU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FINU 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 EAFE are associated (or correlated) with FINU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FINU has no effect on the direction of IShares MSCI i.e., IShares MSCI and FINU go up and down completely randomly.

Pair Corralation between IShares MSCI and FINU

If you would invest  5,947  in iShares MSCI EAFE on February 2, 2024 and sell it today you would earn a total of  270.00  from holding iShares MSCI EAFE or generate 4.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iShares MSCI EAFE  vs.  FINU

iShares MSCI EAFE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI EAFE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FINU

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FINU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FINU is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares MSCI and FINU

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

The idea behind iShares MSCI EAFE and FINU 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.