Correlation Between IShares Trust and FibroGen
Can any of the company-specific risk be diversified away by investing in both IShares Trust and FibroGen 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 FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and FibroGen, you can compare the effects of market volatilities on IShares Trust and FibroGen 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 FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and FibroGen.
Diversification Opportunities for IShares Trust and FibroGen
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and FibroGen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen 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 FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of IShares Trust i.e., IShares Trust and FibroGen go up and down completely randomly.
Pair Corralation between IShares Trust and FibroGen
Assuming the 90 days trading horizon IShares Trust is expected to generate 4.53 times less return on investment than FibroGen. But when comparing it to its historical volatility, iShares Trust is 4.72 times less risky than FibroGen. It trades about 0.27 of its potential returns per unit of risk. FibroGen is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 640.00 in FibroGen on August 29, 2024 and sell it today you would earn a total of 154.00 from holding FibroGen or generate 24.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. FibroGen
Performance |
| Timeline |
| iShares Trust |
| FibroGen |
IShares Trust and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and FibroGen
The main advantage of trading using opposite IShares Trust and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| FibroGen vs. Vertex Pharmaceuticals | FibroGen vs. Bristol Myers Squibb | FibroGen vs. The Select Sector | FibroGen vs. Promotora y Operadora |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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