Correlation Between IShares Core and SGI Enhanced
Can any of the company-specific risk be diversified away by investing in both IShares Core and SGI Enhanced 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 Core and SGI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Aggregate and SGI Enhanced Core, you can compare the effects of market volatilities on IShares Core and SGI Enhanced 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 Core with a short position of SGI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SGI Enhanced.
Diversification Opportunities for IShares Core and SGI Enhanced
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SGI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Aggregate and SGI Enhanced Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Enhanced Core and IShares Core 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 Core Aggregate are associated (or correlated) with SGI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Enhanced Core has no effect on the direction of IShares Core i.e., IShares Core and SGI Enhanced go up and down completely randomly.
Pair Corralation between IShares Core and SGI Enhanced
Considering the 90-day investment horizon iShares Core Aggregate is expected to generate 3.87 times more return on investment than SGI Enhanced. However, IShares Core is 3.87 times more volatile than SGI Enhanced Core. It trades about 0.09 of its potential returns per unit of risk. SGI Enhanced Core is currently generating about 0.35 per unit of risk. If you would invest 9,744 in iShares Core Aggregate on September 18, 2024 and sell it today you would earn a total of 57.00 from holding iShares Core Aggregate or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Aggregate vs. SGI Enhanced Core
Performance |
| Timeline |
| iShares Core Aggregate |
| SGI Enhanced Core |
IShares Core and SGI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SGI Enhanced
The main advantage of trading using opposite IShares Core and SGI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SGI Enhanced 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 SGI Enhanced will offset losses from the drop in SGI Enhanced's long position.| IShares Core vs. ClearShares Ultra Short Maturity | IShares Core vs. PGIM Active High | IShares Core vs. Pacer Trendpilot Bond | IShares Core vs. Pacer Lunt Large |
| SGI Enhanced vs. ClearShares Ultra Short Maturity | SGI Enhanced vs. PGIM Active High | SGI Enhanced vs. Pacer Trendpilot Bond | SGI Enhanced vs. Pacer Lunt Large |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |