Correlation Between IShares Global and IShares Dividend
Can any of the company-specific risk be diversified away by investing in both IShares Global and IShares Dividend 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 Global and IShares Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Monthly and iShares Dividend Growers, you can compare the effects of market volatilities on IShares Global and IShares Dividend 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 Global with a short position of IShares Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and IShares Dividend.
Diversification Opportunities for IShares Global and IShares Dividend
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Monthly and iShares Dividend Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend Growers and IShares Global 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 Global Monthly are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend Growers has no effect on the direction of IShares Global i.e., IShares Global and IShares Dividend go up and down completely randomly.
Pair Corralation between IShares Global and IShares Dividend
Assuming the 90 days trading horizon IShares Global is expected to generate 1.19 times less return on investment than IShares Dividend. In addition to that, IShares Global is 1.09 times more volatile than iShares Dividend Growers. It trades about 0.25 of its total potential returns per unit of risk. iShares Dividend Growers is currently generating about 0.32 per unit of volatility. If you would invest 5,504 in iShares Dividend Growers on September 1, 2024 and sell it today you would earn a total of 210.00 from holding iShares Dividend Growers or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Global Monthly vs. iShares Dividend Growers
Performance |
| Timeline |
| iShares Global Monthly |
| iShares Dividend Growers |
IShares Global and IShares Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and IShares Dividend
The main advantage of trading using opposite IShares Global and IShares Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, IShares Dividend 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 Dividend will offset losses from the drop in IShares Dividend's long position.| IShares Global vs. iShares Global Infrastructure | IShares Global vs. iShares Global Real | IShares Global vs. iShares Dividend Growers | IShares Global vs. iShares 1 5 Year |
| IShares Dividend vs. iShares High Dividend | IShares Dividend vs. iShares Global Monthly | IShares Dividend vs. iShares Global Infrastructure | IShares Dividend vs. iShares MSCI Min |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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