Correlation Between IShares Dividend and Litman Gregory

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Can any of the company-specific risk be diversified away by investing in both IShares Dividend and Litman Gregory 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 Dividend and Litman Gregory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Dividend and and Litman Gregory Funds, you can compare the effects of market volatilities on IShares Dividend and Litman Gregory 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 Dividend with a short position of Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dividend and Litman Gregory.

Diversification Opportunities for IShares Dividend and Litman Gregory

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IShares and Litman is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and Litman Gregory Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Funds and IShares Dividend 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 Dividend and are associated (or correlated) with Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Funds has no effect on the direction of IShares Dividend i.e., IShares Dividend and Litman Gregory go up and down completely randomly.

Pair Corralation between IShares Dividend and Litman Gregory

Given the investment horizon of 90 days iShares Dividend and is expected to generate 0.39 times more return on investment than Litman Gregory. However, iShares Dividend and is 2.54 times less risky than Litman Gregory. It trades about 0.32 of its potential returns per unit of risk. Litman Gregory Funds is currently generating about -0.06 per unit of risk. If you would invest  4,819  in iShares Dividend and on September 1, 2024 and sell it today you would earn a total of  276.00  from holding iShares Dividend and or generate 5.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

iShares Dividend and  vs.  Litman Gregory Funds

 Performance 
       Timeline  
iShares Dividend 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, IShares Dividend may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Litman Gregory Funds 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Litman Gregory Funds are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Litman Gregory exhibited solid returns over the last few months and may actually be approaching a breakup point.

IShares Dividend and Litman Gregory Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Dividend and Litman Gregory

The main advantage of trading using opposite IShares Dividend and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Dividend position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.
The idea behind iShares Dividend and and Litman Gregory Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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