Correlation Between IShares Convertible and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares Convertible 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 IShares Convertible and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Convertible Bond and iShares Core Canadian, you can compare the effects of market volatilities on IShares Convertible 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 IShares Convertible with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Convertible and IShares Core.
Diversification Opportunities for IShares Convertible and IShares Core
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares Convertible Bond and iShares Core Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Canadian and IShares Convertible 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 Convertible Bond 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 Canadian has no effect on the direction of IShares Convertible i.e., IShares Convertible and IShares Core go up and down completely randomly.
Pair Corralation between IShares Convertible and IShares Core
Assuming the 90 days trading horizon iShares Convertible Bond is expected to generate 0.66 times more return on investment than IShares Core. However, iShares Convertible Bond is 1.52 times less risky than IShares Core. It trades about 0.05 of its potential returns per unit of risk. iShares Core Canadian is currently generating about 0.01 per unit of risk. If you would invest 1,477 in iShares Convertible Bond on August 29, 2024 and sell it today you would earn a total of 255.00 from holding iShares Convertible Bond or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.92% |
| Values | Daily Returns |
iShares Convertible Bond vs. iShares Core Canadian
Performance |
| Timeline |
| iShares Convertible Bond |
| iShares Core Canadian |
IShares Convertible and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Convertible and IShares Core
The main advantage of trading using opposite IShares Convertible and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Convertible 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.| IShares Convertible vs. Purpose Monthly Income | IShares Convertible vs. Purpose Core Dividend | IShares Convertible vs. Purpose Tactical Hedged | IShares Convertible vs. Purpose Best Ideas |
| IShares Core vs. iShares MSCI Emerging | IShares Core vs. iShares MSCI Global | IShares Core vs. iShares Core Canadian | IShares Core vs. Vanguard Total Market |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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