Correlation Between IShares Trust and Gen Digital
Can any of the company-specific risk be diversified away by investing in both IShares Trust and Gen Digital 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 Trust and Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Gen Digital, you can compare the effects of market volatilities on IShares Trust and Gen Digital 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 Trust with a short position of Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Gen Digital.
Diversification Opportunities for IShares Trust and Gen Digital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Gen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital and IShares Trust 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 Trust are associated (or correlated) with Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of IShares Trust i.e., IShares Trust and Gen Digital go up and down completely randomly.
Pair Corralation between IShares Trust and Gen Digital
Assuming the 90 days trading horizon IShares Trust is expected to generate 1.03 times less return on investment than Gen Digital. In addition to that, IShares Trust is 1.23 times more volatile than Gen Digital. It trades about 0.04 of its total potential returns per unit of risk. Gen Digital is currently generating about 0.05 per unit of volatility. If you would invest 11,914 in Gen Digital on October 13, 2024 and sell it today you would earn a total of 5,979 from holding Gen Digital or generate 50.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.06% |
| Values | Daily Returns |
iShares Trust vs. Gen Digital
Performance |
| Timeline |
| iShares Trust |
| Gen Digital |
IShares Trust and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Gen Digital
The main advantage of trading using opposite IShares Trust and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| IShares Trust vs. iShares BMFBovespa Small | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares iShares |
| Gen Digital vs. Tyson Foods | Gen Digital vs. United Airlines Holdings | Gen Digital vs. Paycom Software | Gen Digital vs. DXC Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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