Correlation Between IShares Core and ZKB Platinum
Can any of the company-specific risk be diversified away by investing in both IShares Core and ZKB Platinum 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 ZKB Platinum 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 ZKB Platinum ETF, you can compare the effects of market volatilities on IShares Core and ZKB Platinum 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 ZKB Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and ZKB Platinum.
Diversification Opportunities for IShares Core and ZKB Platinum
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and ZKB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and ZKB Platinum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Platinum ETF 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 ZKB Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Platinum ETF has no effect on the direction of IShares Core i.e., IShares Core and ZKB Platinum go up and down completely randomly.
Pair Corralation between IShares Core and ZKB Platinum
Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.45 times more return on investment than ZKB Platinum. However, iShares Core SP is 2.22 times less risky than ZKB Platinum. It trades about 0.2 of its potential returns per unit of risk. ZKB Platinum ETF is currently generating about 0.08 per unit of risk. If you would invest 58,470 in iShares Core SP on September 4, 2024 and sell it today you would earn a total of 5,590 from holding iShares Core SP or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. ZKB Platinum ETF
Performance |
| Timeline |
| iShares Core SP |
| ZKB Platinum ETF |
IShares Core and ZKB Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and ZKB Platinum
The main advantage of trading using opposite IShares Core and ZKB Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, ZKB Platinum 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 ZKB Platinum will offset losses from the drop in ZKB Platinum'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 |
| ZKB Platinum vs. UBSFund Solutions MSCI | ZKB Platinum vs. Vanguard SP 500 | ZKB Platinum vs. iShares VII PLC | ZKB Platinum vs. iShares Core SP |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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