Correlation Between American Sierra and IShares SP
Can any of the company-specific risk be diversified away by investing in both American Sierra and IShares SP 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 American Sierra and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Sierra Gold and iShares SP Small Cap, you can compare the effects of market volatilities on American Sierra and IShares SP 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 American Sierra with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Sierra and IShares SP.
Diversification Opportunities for American Sierra and IShares SP
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and IShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Sierra Gold and iShares SP Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP Small and American Sierra 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 American Sierra Gold are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP Small has no effect on the direction of American Sierra i.e., American Sierra and IShares SP go up and down completely randomly.
Pair Corralation between American Sierra and IShares SP
Given the investment horizon of 90 days American Sierra Gold is expected to generate 16.4 times more return on investment than IShares SP. However, American Sierra is 16.4 times more volatile than iShares SP Small Cap. It trades about 0.06 of its potential returns per unit of risk. iShares SP Small Cap is currently generating about 0.05 per unit of risk. If you would invest 3.00 in American Sierra Gold on September 12, 2024 and sell it today you would lose (2.60) from holding American Sierra Gold or give up 86.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Sierra Gold vs. iShares SP Small Cap
Performance |
| Timeline |
| American Sierra Gold |
| iShares SP Small |
American Sierra and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Sierra and IShares SP
The main advantage of trading using opposite American Sierra and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Sierra position performs unexpectedly, IShares SP 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 SP will offset losses from the drop in IShares SP's long position.| American Sierra vs. Gold79 Mines | American Sierra vs. Arctic Star Exploration | American Sierra vs. Arras Minerals Corp | American Sierra vs. American Creek Resources |
| IShares SP vs. American Sierra Gold | IShares SP vs. American Century ETF | IShares SP vs. Avantis Emerging Markets | IShares SP vs. Avantis Emerging Markets |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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