Correlation Between Volatility Shares and IShares Core
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and IShares Core 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 Volatility Shares and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and iShares Core Aggregate, you can compare the effects of market volatilities on Volatility Shares and IShares Core 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 Volatility Shares with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and IShares Core.
Diversification Opportunities for Volatility Shares and IShares Core
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volatility and IShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and iShares Core Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Aggregate and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Aggregate has no effect on the direction of Volatility Shares i.e., Volatility Shares and IShares Core go up and down completely randomly.
Pair Corralation between Volatility Shares and IShares Core
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 20.57 times more return on investment than IShares Core. However, Volatility Shares is 20.57 times more volatile than iShares Core Aggregate. It trades about 0.24 of its potential returns per unit of risk. iShares Core Aggregate is currently generating about 0.09 per unit of risk. If you would invest 5,388 in Volatility Shares Trust on September 18, 2024 and sell it today you would earn a total of 1,667 from holding Volatility Shares Trust or generate 30.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. iShares Core Aggregate
Performance |
| Timeline |
| Volatility Shares Trust |
| iShares Core Aggregate |
Volatility Shares and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and IShares Core
The main advantage of trading using opposite Volatility Shares and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| Volatility Shares vs. Bitwise Crypto Industry | Volatility Shares vs. Grayscale Bitcoin Mini | Volatility Shares vs. First Trust SkyBridge |
| IShares Core vs. ClearShares Ultra Short Maturity | IShares Core vs. PGIM Active High | IShares Core vs. Pacer Trendpilot Bond | IShares Core vs. Pacer Lunt Large |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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