Correlation Between IShares Core and MKAM ETF
Can any of the company-specific risk be diversified away by investing in both IShares Core and MKAM ETF 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 MKAM ETF 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 MKAM ETF, you can compare the effects of market volatilities on IShares Core and MKAM ETF 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 MKAM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and MKAM ETF.
Diversification Opportunities for IShares Core and MKAM ETF
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and MKAM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Growth and MKAM ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKAM ETF 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 MKAM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKAM ETF has no effect on the direction of IShares Core i.e., IShares Core and MKAM ETF go up and down completely randomly.
Pair Corralation between IShares Core and MKAM ETF
Considering the 90-day investment horizon IShares Core is expected to generate 1.02 times less return on investment than MKAM ETF. In addition to that, IShares Core is 1.15 times more volatile than MKAM ETF. It trades about 0.09 of its total potential returns per unit of risk. MKAM ETF is currently generating about 0.11 per unit of volatility. If you would invest 2,724 in MKAM ETF on November 3, 2024 and sell it today you would earn a total of 239.24 from holding MKAM ETF or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.46% |
| Values | Daily Returns |
iShares Core Growth vs. MKAM ETF
Performance |
| Timeline |
| iShares Core Growth |
| MKAM ETF |
IShares Core and MKAM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and MKAM ETF
The main advantage of trading using opposite IShares Core and MKAM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, MKAM ETF 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 MKAM ETF will offset losses from the drop in MKAM ETF'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 |
| MKAM ETF vs. FT Vest Equity | MKAM ETF vs. Northern Lights | MKAM ETF vs. Dimensional International High | MKAM ETF vs. First Trust Exchange Traded |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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