Correlation Between IShares Future and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Future and IShares Trust 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 Future and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Future AI and iShares Trust, you can compare the effects of market volatilities on IShares Future and IShares Trust 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 Future with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Future and IShares Trust.
Diversification Opportunities for IShares Future and IShares Trust
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Future AI and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and IShares Future 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 Future AI are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares Future i.e., IShares Future and IShares Trust go up and down completely randomly.
Pair Corralation between IShares Future and IShares Trust
Given the investment horizon of 90 days IShares Future is expected to generate 1.19 times less return on investment than IShares Trust. In addition to that, IShares Future is 1.85 times more volatile than iShares Trust. It trades about 0.07 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.15 per unit of volatility. If you would invest 2,421 in iShares Trust on September 13, 2024 and sell it today you would earn a total of 891.00 from holding iShares Trust or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 58.7% |
| Values | Daily Returns |
iShares Future AI vs. iShares Trust
Performance |
| Timeline |
| iShares Future AI |
| iShares Trust |
IShares Future and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Future and IShares Trust
The main advantage of trading using opposite IShares Future and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Future position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| IShares Future vs. Invesco DWA Utilities | IShares Future vs. Invesco Dynamic Large | IShares Future vs. SCOR PK | IShares Future vs. Morningstar Unconstrained Allocation |
| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. EA Series Trust | IShares Trust vs. Aptus Defined 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.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance |