Correlation Between Fieldstone UVA and IShares Core
Can any of the company-specific risk be diversified away by investing in both Fieldstone UVA and IShares Core 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 Fieldstone UVA and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fieldstone UVA Unconstrained and iShares Core 10, you can compare the effects of market volatilities on Fieldstone UVA and IShares Core 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 Fieldstone UVA with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fieldstone UVA and IShares Core.
Diversification Opportunities for Fieldstone UVA and IShares Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fieldstone and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fieldstone UVA Unconstrained and iShares Core 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core 10 and Fieldstone UVA 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 Fieldstone UVA Unconstrained are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core 10 has no effect on the direction of Fieldstone UVA i.e., Fieldstone UVA and IShares Core go up and down completely randomly.
Pair Corralation between Fieldstone UVA and IShares Core
Given the investment horizon of 90 days Fieldstone UVA is expected to generate 2.01 times less return on investment than IShares Core. But when comparing it to its historical volatility, Fieldstone UVA Unconstrained is 1.53 times less risky than IShares Core. It trades about 0.06 of its potential returns per unit of risk. iShares Core 10 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,028 in iShares Core 10 on August 28, 2024 and sell it today you would earn a total of 69.00 from holding iShares Core 10 or generate 1.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fieldstone UVA Unconstrained vs. iShares Core 10
Performance |
Timeline |
Fieldstone UVA Uncon |
iShares Core 10 |
Fieldstone UVA and IShares Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fieldstone UVA and IShares Core
The main advantage of trading using opposite Fieldstone UVA and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fieldstone UVA position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.Fieldstone UVA vs. FlexShares Credit Scored Corporate | Fieldstone UVA vs. FlexShares Disciplined Duration | Fieldstone UVA vs. FlexShares Quality Large | Fieldstone UVA vs. First Trust Emerging |
IShares Core vs. FlexShares Credit Scored Corporate | IShares Core vs. FlexShares Disciplined Duration | IShares Core vs. FlexShares Quality Large | IShares Core vs. First Trust Emerging |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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