Correlation Between IShares Core and Legal General
Can any of the company-specific risk be diversified away by investing in both IShares Core and Legal General 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 Legal General 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 Legal General UCITS, you can compare the effects of market volatilities on IShares Core and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Legal General.
Diversification Opportunities for IShares Core and Legal General
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Legal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS 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 Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of IShares Core i.e., IShares Core and Legal General go up and down completely randomly.
Pair Corralation between IShares Core and Legal General
Assuming the 90 days trading horizon iShares Core MSCI is expected to under-perform the Legal General. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core MSCI is 1.83 times less risky than Legal General. The etf trades about -0.04 of its potential returns per unit of risk. The Legal General UCITS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,080 in Legal General UCITS on August 31, 2024 and sell it today you would earn a total of 93.00 from holding Legal General UCITS or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core MSCI vs. Legal General UCITS
Performance |
| Timeline |
| iShares Core MSCI |
| Legal General UCITS |
IShares Core and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Legal General
The main advantage of trading using opposite IShares Core and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| IShares Core vs. iShares III Public | IShares Core vs. iShares France Govt | IShares Core vs. iShares Edge MSCI | IShares Core vs. iShares Core FTSE |
| Legal General vs. Legal General UCITS | Legal General vs. LG Russell 2000 | Legal General vs. VanEck Multi Asset Growth | Legal General vs. iShares III Public |
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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