Correlation Between IShares Trust and CMR SAB
Can any of the company-specific risk be diversified away by investing in both IShares Trust and CMR SAB 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 Trust and CMR SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and CMR SAB de, you can compare the effects of market volatilities on IShares Trust and CMR SAB 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 Trust with a short position of CMR SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and CMR SAB.
Diversification Opportunities for IShares Trust and CMR SAB
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and CMR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and CMR SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMR SAB de and IShares Trust 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 Trust are associated (or correlated) with CMR SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMR SAB de has no effect on the direction of IShares Trust i.e., IShares Trust and CMR SAB go up and down completely randomly.
Pair Corralation between IShares Trust and CMR SAB
Assuming the 90 days trading horizon iShares Trust is expected to generate 0.12 times more return on investment than CMR SAB. However, iShares Trust is 8.01 times less risky than CMR SAB. It trades about 0.15 of its potential returns per unit of risk. CMR SAB de is currently generating about -0.18 per unit of risk. If you would invest 180,200 in iShares Trust on August 25, 2024 and sell it today you would earn a total of 3,484 from holding iShares Trust or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
iShares Trust vs. CMR SAB de
Performance |
| Timeline |
| iShares Trust |
| CMR SAB de |
IShares Trust and CMR SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and CMR SAB
The main advantage of trading using opposite IShares Trust and CMR SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, CMR SAB 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 CMR SAB will offset losses from the drop in CMR SAB's long position.| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard STAR Funds | IShares Trust vs. SPDR SP 500 |
| CMR SAB vs. United Airlines Holdings | CMR SAB vs. First Republic Bank | CMR SAB vs. Samsung Electronics Co | CMR SAB vs. Southwest Airlines |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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