Correlation Between IShares Core and LG Clean
Can any of the company-specific risk be diversified away by investing in both IShares Core and LG Clean 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 Core and LG Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and LG Clean Water, you can compare the effects of market volatilities on IShares Core and LG Clean 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 Core with a short position of LG Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and LG Clean.
Diversification Opportunities for IShares Core and LG Clean
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and GLUG is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and LG Clean Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Clean Water and IShares Core 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 Core SP are associated (or correlated) with LG Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Clean Water has no effect on the direction of IShares Core i.e., IShares Core and LG Clean go up and down completely randomly.
Pair Corralation between IShares Core and LG Clean
Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.79 times more return on investment than LG Clean. However, iShares Core SP is 1.26 times less risky than LG Clean. It trades about 0.11 of its potential returns per unit of risk. LG Clean Water is currently generating about 0.04 per unit of risk. If you would invest 41,890 in iShares Core SP on September 3, 2024 and sell it today you would earn a total of 22,070 from holding iShares Core SP or generate 52.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Core SP vs. LG Clean Water
Performance |
| Timeline |
| iShares Core SP |
| LG Clean Water |
IShares Core and LG Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and LG Clean
The main advantage of trading using opposite IShares Core and LG Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, LG Clean 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 LG Clean will offset losses from the drop in LG Clean's long position.| IShares Core vs. iShares Corp Bond | IShares Core vs. iShares Emerging Asia | IShares Core vs. iShares MSCI Global | IShares Core vs. iShares VII PLC |
| LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. VanEck Solana ETN | LG Clean vs. iShares Corp Bond |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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