Correlation Between Brompton Global and IShares Global
Can any of the company-specific risk be diversified away by investing in both Brompton Global and IShares Global 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 Brompton Global and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Global Dividend and iShares Global Monthly, you can compare the effects of market volatilities on Brompton Global and IShares Global 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 Brompton Global with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Global and IShares Global.
Diversification Opportunities for Brompton Global and IShares Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brompton and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Global Dividend and iShares Global Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Monthly and Brompton Global 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 Brompton Global Dividend are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Monthly has no effect on the direction of Brompton Global i.e., Brompton Global and IShares Global go up and down completely randomly.
Pair Corralation between Brompton Global and IShares Global
Assuming the 90 days trading horizon Brompton Global Dividend is expected to generate 1.76 times more return on investment than IShares Global. However, Brompton Global is 1.76 times more volatile than iShares Global Monthly. It trades about 0.14 of its potential returns per unit of risk. iShares Global Monthly is currently generating about 0.2 per unit of risk. If you would invest 2,213 in Brompton Global Dividend on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Brompton Global Dividend or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton Global Dividend vs. iShares Global Monthly
Performance |
| Timeline |
| Brompton Global Dividend |
| iShares Global Monthly |
Brompton Global and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Global and IShares Global
The main advantage of trading using opposite Brompton Global and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Global position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| Brompton Global vs. NBI Active Canadian | Brompton Global vs. NBI Canadian Family | Brompton Global vs. NBI Liquid Alternatives | Brompton Global vs. NBI Sustainable Canadian |
| IShares Global vs. iShares Global Infrastructure | IShares Global vs. iShares Global Real | IShares Global vs. iShares Dividend Growers | IShares Global vs. iShares 1 5 Year |
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
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |