Correlation Between IShares Core and VanEck Oil
Can any of the company-specific risk be diversified away by investing in both IShares Core and VanEck Oil 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 VanEck Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and VanEck Oil Services, you can compare the effects of market volatilities on IShares Core and VanEck Oil 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 VanEck Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and VanEck Oil.
Diversification Opportunities for IShares Core and VanEck Oil
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and VanEck is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and VanEck Oil Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Oil Services 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 MSCI are associated (or correlated) with VanEck Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Oil Services has no effect on the direction of IShares Core i.e., IShares Core and VanEck Oil go up and down completely randomly.
Pair Corralation between IShares Core and VanEck Oil
Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 0.66 times more return on investment than VanEck Oil. However, iShares Core MSCI is 1.51 times less risky than VanEck Oil. It trades about 0.05 of its potential returns per unit of risk. VanEck Oil Services is currently generating about 0.02 per unit of risk. If you would invest 2,874 in iShares Core MSCI on September 14, 2024 and sell it today you would earn a total of 650.00 from holding iShares Core MSCI or generate 22.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.21% |
| Values | Daily Returns |
iShares Core MSCI vs. VanEck Oil Services
Performance |
| Timeline |
| iShares Core MSCI |
| VanEck Oil Services |
IShares Core and VanEck Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and VanEck Oil
The main advantage of trading using opposite IShares Core and VanEck Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, VanEck Oil 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 VanEck Oil will offset losses from the drop in VanEck Oil'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 |
| VanEck Oil vs. UBSFund Solutions MSCI | VanEck Oil vs. Vanguard SP 500 | VanEck Oil vs. iShares VII PLC | VanEck Oil 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |