Correlation Between Biogen and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Biogen 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 Biogen and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and iShares Trust , you can compare the effects of market volatilities on Biogen 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 Biogen with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and IShares Trust.
Diversification Opportunities for Biogen and IShares Trust
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biogen and IShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Biogen 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 Biogen Inc 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 Biogen i.e., Biogen and IShares Trust go up and down completely randomly.
Pair Corralation between Biogen and IShares Trust
Assuming the 90 days trading horizon Biogen Inc is expected to under-perform the IShares Trust. In addition to that, Biogen is 1.23 times more volatile than iShares Trust . It trades about -0.04 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 248,882 in iShares Trust on September 2, 2024 and sell it today you would earn a total of 81,118 from holding iShares Trust or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. iShares Trust
Performance |
| Timeline |
| Biogen Inc |
| iShares Trust |
Biogen and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and IShares Trust
The main advantage of trading using opposite Biogen and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen 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.| Biogen vs. First Majestic Silver | Biogen vs. GMxico Transportes SAB | Biogen vs. Delta Air Lines | Biogen vs. Taiwan Semiconductor Manufacturing |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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