Correlation Between IShares MSCI and WisdomTree Siegel

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

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

Diversification Opportunities for IShares MSCI and WisdomTree Siegel

0.96

Correlation Coefficient

IShares MSCI  WisdomTree Siegel

Almost no diversification

The 3 months correlation between IShares and WisdomTree is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Canada and WisdomTree Siegel Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Siegel 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 Canada are associated (or correlated) with WisdomTree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Siegel has no effect on the direction of IShares MSCI i.e., IShares MSCI and WisdomTree Siegel go up and down completely randomly.

Pair Corralation between IShares MSCI and WisdomTree Siegel

Considering the 90-day investment horizon iShares MSCI Canada is expected to generate 1.28 times more return on investment than WisdomTree Siegel. However, IShares MSCI is 1.28 times more volatile than WisdomTree Siegel Moderate. It trades about 0.28 of its potential returns per unit of risk. WisdomTree Siegel Moderate is currently generating about 0.25 per unit of risk. If you would invest  4,203  in iShares MSCI Canada on May 1, 2025 and sell it today you would earn a total of  435.00  from holding iShares MSCI Canada or generate 10.35% return on investment over 90 days.

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

iShares MSCI Canada  vs.  WisdomTree Siegel Moderate

iShares MSCI Canada

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Canada are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in August 2025.

WisdomTree Siegel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Siegel Moderate are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, WisdomTree Siegel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IShares MSCI and WisdomTree Siegel

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

The idea behind iShares MSCI Canada and WisdomTree Siegel Moderate 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.