Correlation Between MSCI and Dun Bradstreet

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

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

Diversification Opportunities for MSCI and Dun Bradstreet

0.73

Correlation Coefficient

MSCI  Dun Bradstreet

Poor diversification

The 3 months correlation between MSCI and Dun is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MSCI Inc and Dun Bradstreet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dun Bradstreet Holdings and 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 MSCI Inc are associated (or correlated) with Dun Bradstreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dun Bradstreet Holdings has no effect on the direction of MSCI i.e., MSCI and Dun Bradstreet go up and down completely randomly.

Pair Corralation between MSCI and Dun Bradstreet

Given the investment horizon of 90 days MSCI Inc is expected to under-perform the Dun Bradstreet. In addition to that, MSCI is 2.69 times more volatile than Dun Bradstreet Holdings. It trades about -0.18 of its total potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about -0.22 per unit of volatility. If you would invest  995.00  in Dun Bradstreet Holdings on January 30, 2024 and sell it today you would lose (60.00) from holding Dun Bradstreet Holdings or give up 6.03% of portfolio value over 90 days.

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

MSCI Inc  vs.  Dun Bradstreet Holdings

MSCI Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MSCI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Dun Bradstreet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dun Bradstreet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MSCI and Dun Bradstreet

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

The idea behind MSCI Inc and Dun Bradstreet Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.