Correlation Between IShares Select and AltShares Event
Can any of the company-specific risk be diversified away by investing in both IShares Select and AltShares Event 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 Select and AltShares Event into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Select Dividend and AltShares Event Driven ETF, you can compare the effects of market volatilities on IShares Select and AltShares Event 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 Select with a short position of AltShares Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Select and AltShares Event.
Diversification Opportunities for IShares Select and AltShares Event
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and AltShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Select Dividend and AltShares Event Driven ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Event Driven and IShares Select 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 Select Dividend are associated (or correlated) with AltShares Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Event Driven has no effect on the direction of IShares Select i.e., IShares Select and AltShares Event go up and down completely randomly.
Pair Corralation between IShares Select and AltShares Event
Considering the 90-day investment horizon iShares Select Dividend is expected to generate 1.78 times more return on investment than AltShares Event. However, IShares Select is 1.78 times more volatile than AltShares Event Driven ETF. It trades about 0.18 of its potential returns per unit of risk. AltShares Event Driven ETF is currently generating about 0.17 per unit of risk. If you would invest 12,127 in iShares Select Dividend on September 1, 2024 and sell it today you would earn a total of 2,214 from holding iShares Select Dividend or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Select Dividend vs. AltShares Event Driven ETF
Performance |
| Timeline |
| iShares Select Dividend |
| AltShares Event Driven |
IShares Select and AltShares Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Select and AltShares Event
The main advantage of trading using opposite IShares Select and AltShares Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Select position performs unexpectedly, AltShares Event 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 AltShares Event will offset losses from the drop in AltShares Event's long position.| IShares Select vs. SPDR SP Dividend | IShares Select vs. Vanguard Dividend Appreciation | IShares Select vs. iShares Core High | IShares Select vs. iShares Preferred and |
| AltShares Event vs. First Trust Managed | AltShares Event vs. Franklin Liberty Systematic | AltShares Event vs. Overlay Shares Foreign | AltShares Event vs. First Trust LongShort |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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