Correlation Between IShares Core and Aptus Defined
Can any of the company-specific risk be diversified away by investing in both IShares Core and Aptus Defined 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 Aptus Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Growth and Aptus Defined Risk, you can compare the effects of market volatilities on IShares Core and Aptus Defined 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 Aptus Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Aptus Defined.
Diversification Opportunities for IShares Core and Aptus Defined
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Aptus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Growth and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk 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 Growth are associated (or correlated) with Aptus Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of IShares Core i.e., IShares Core and Aptus Defined go up and down completely randomly.
Pair Corralation between IShares Core and Aptus Defined
Considering the 90-day investment horizon iShares Core Growth is expected to generate 1.12 times more return on investment than Aptus Defined. However, IShares Core is 1.12 times more volatile than Aptus Defined Risk. It trades about 0.09 of its potential returns per unit of risk. Aptus Defined Risk is currently generating about 0.06 per unit of risk. If you would invest 4,757 in iShares Core Growth on September 4, 2024 and sell it today you would earn a total of 1,175 from holding iShares Core Growth or generate 24.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Growth vs. Aptus Defined Risk
Performance |
| Timeline |
| iShares Core Growth |
| Aptus Defined Risk |
IShares Core and Aptus Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Aptus Defined
The main advantage of trading using opposite IShares Core and Aptus Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Aptus Defined 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 Aptus Defined will offset losses from the drop in Aptus Defined's long position.| IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Aggressive | IShares Core vs. iShares Core Conservative | IShares Core vs. Vanguard Mega Cap |
| Aptus Defined vs. Amplify BlackSwan Growth | Aptus Defined vs. Aptus Collared Income | Aptus Defined vs. Aptus Drawdown Managed | Aptus Defined vs. Cambria Tail Risk |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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