Correlation Between IShares Core and Spinnaker ETF

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Can any of the company-specific risk be diversified away by investing in both IShares Core and Spinnaker 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 Spinnaker 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 Spinnaker ETF Series, you can compare the effects of market volatilities on IShares Core and Spinnaker 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 Spinnaker ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Spinnaker ETF.

Diversification Opportunities for IShares Core and Spinnaker ETF

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between IShares and Spinnaker is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Growth and Spinnaker ETF Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnaker ETF Series 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 Spinnaker ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnaker ETF Series has no effect on the direction of IShares Core i.e., IShares Core and Spinnaker ETF go up and down completely randomly.

Pair Corralation between IShares Core and Spinnaker ETF

Considering the 90-day investment horizon iShares Core Growth is expected to generate 0.96 times more return on investment than Spinnaker ETF. However, iShares Core Growth is 1.04 times less risky than Spinnaker ETF. It trades about 0.1 of its potential returns per unit of risk. Spinnaker ETF Series is currently generating about 0.06 per unit of risk. If you would invest  4,556  in iShares Core Growth on September 14, 2024 and sell it today you would earn a total of  1,352  from holding iShares Core Growth or generate 29.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

iShares Core Growth  vs.  Spinnaker ETF Series

 Performance 
       Timeline  
iShares Core Growth 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Growth are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Spinnaker ETF Series 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Spinnaker ETF Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Spinnaker ETF is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

IShares Core and Spinnaker ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Core and Spinnaker ETF

The main advantage of trading using opposite IShares Core and Spinnaker ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Spinnaker 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 Spinnaker ETF will offset losses from the drop in Spinnaker ETF's long position.
The idea behind iShares Core Growth and Spinnaker ETF Series pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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.

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