Correlation Between IShares JP and KBUY
Can any of the company-specific risk be diversified away by investing in both IShares JP and KBUY 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 JP and KBUY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and KBUY, you can compare the effects of market volatilities on IShares JP and KBUY 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 JP with a short position of KBUY. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and KBUY.
Diversification Opportunities for IShares JP and KBUY
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and KBUY is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and KBUY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBUY and IShares JP 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 JP Morgan are associated (or correlated) with KBUY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBUY has no effect on the direction of IShares JP i.e., IShares JP and KBUY go up and down completely randomly.
Pair Corralation between IShares JP and KBUY
Given the investment horizon of 90 days IShares JP is expected to generate 5.92 times less return on investment than KBUY. In addition to that, IShares JP is 1.08 times more volatile than KBUY. It trades about 0.13 of its total potential returns per unit of risk. KBUY is currently generating about 0.83 per unit of volatility. If you would invest 1,705 in KBUY on September 12, 2024 and sell it today you would earn a total of 23.00 from holding KBUY or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.14% |
| Values | Daily Returns |
iShares JP Morgan vs. KBUY
Performance |
| Timeline |
| iShares JP Morgan |
| KBUY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares JP and KBUY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and KBUY
The main advantage of trading using opposite IShares JP and KBUY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP position performs unexpectedly, KBUY 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 KBUY will offset losses from the drop in KBUY's long position.| IShares JP vs. iShares JP Morgan | IShares JP vs. SPDR Bloomberg International | IShares JP vs. VanEck JP Morgan | IShares JP vs. Invesco Fundamental High |
| KBUY vs. KraneShares CSI China | KBUY vs. Invesco China Technology | KBUY vs. iShares MSCI India | KBUY vs. Xtrackers Harvest CSI |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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