Correlation Between IShares Core and ZKB Gold
Can any of the company-specific risk be diversified away by investing in both IShares Core and ZKB Gold 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 ZKB Gold 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 ZKB Gold ETF, you can compare the effects of market volatilities on IShares Core and ZKB Gold 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 ZKB Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and ZKB Gold.
Diversification Opportunities for IShares Core and ZKB Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and ZKB is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and ZKB Gold ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Gold ETF 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 ZKB Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Gold ETF has no effect on the direction of IShares Core i.e., IShares Core and ZKB Gold go up and down completely randomly.
Pair Corralation between IShares Core and ZKB Gold
Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 0.78 times more return on investment than ZKB Gold. However, iShares Core MSCI is 1.28 times less risky than ZKB Gold. It trades about -0.14 of its potential returns per unit of risk. ZKB Gold ETF is currently generating about -0.14 per unit of risk. If you would invest 3,585 in iShares Core MSCI on September 5, 2024 and sell it today you would lose (107.00) from holding iShares Core MSCI or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core MSCI vs. ZKB Gold ETF
Performance |
| Timeline |
| iShares Core MSCI |
| ZKB Gold ETF |
IShares Core and ZKB Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and ZKB Gold
The main advantage of trading using opposite IShares Core and ZKB Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, ZKB Gold 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 ZKB Gold will offset losses from the drop in ZKB Gold's long position.| IShares Core vs. Vanguard SP 500 | IShares Core vs. iShares Core SP | IShares Core vs. Lyxor Japan UCITS | IShares Core vs. iShares SP 500 |
| ZKB Gold vs. Vanguard SP 500 | ZKB Gold vs. iShares Core SP | ZKB Gold vs. Lyxor Japan UCITS | ZKB Gold vs. iShares SP 500 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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