Correlation Between Fieldstone UVA and IShares Core

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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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fieldstone UVA Unconstrained  vs.  iShares Core 10

 Performance 
       Timeline  
Fieldstone UVA Uncon 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fieldstone UVA Unconstrained has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Fieldstone UVA is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
iShares Core 10 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days iShares Core 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind Fieldstone UVA Unconstrained and iShares Core 10 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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