Correlation Between IShares Core and Investment Managers
Can any of the company-specific risk be diversified away by investing in both IShares Core and Investment Managers 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 Investment Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Conservative and Investment Managers Series, you can compare the effects of market volatilities on IShares Core and Investment Managers 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 Investment Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Investment Managers.
Diversification Opportunities for IShares Core and Investment Managers
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Investment is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Conservative and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers 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 Conservative are associated (or correlated) with Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of IShares Core i.e., IShares Core and Investment Managers go up and down completely randomly.
Pair Corralation between IShares Core and Investment Managers
Considering the 90-day investment horizon iShares Core Conservative is expected to generate 0.4 times more return on investment than Investment Managers. However, iShares Core Conservative is 2.49 times less risky than Investment Managers. It trades about 0.13 of its potential returns per unit of risk. Investment Managers Series is currently generating about 0.02 per unit of risk. If you would invest 3,618 in iShares Core Conservative on August 30, 2024 and sell it today you would earn a total of 198.00 from holding iShares Core Conservative or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Conservative vs. Investment Managers Series
Performance |
| Timeline |
| iShares Core Conservative |
| Investment Managers |
IShares Core and Investment Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Investment Managers
The main advantage of trading using opposite IShares Core and Investment Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Investment Managers 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 Investment Managers will offset losses from the drop in Investment Managers' long position.| IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Aggressive | IShares Core vs. iShares Core Growth | IShares Core vs. iShares Agency Bond |
| Investment Managers vs. VanEck Inflation Allocation | Investment Managers vs. Horizon Kinetics Inflation | Investment Managers vs. SPDR SSgA Multi Asset | Investment Managers vs. Simplify Interest Rate |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |