Correlation Between Forstrong Global and IShares High
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and IShares High 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 Forstrong Global and IShares High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and iShares High Dividend, you can compare the effects of market volatilities on Forstrong Global and IShares High 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 Forstrong Global with a short position of IShares High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and IShares High.
Diversification Opportunities for Forstrong Global and IShares High
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forstrong and IShares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and iShares High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares High Dividend and Forstrong Global 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 Forstrong Global Income are associated (or correlated) with IShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares High Dividend has no effect on the direction of Forstrong Global i.e., Forstrong Global and IShares High go up and down completely randomly.
Pair Corralation between Forstrong Global and IShares High
Assuming the 90 days trading horizon Forstrong Global is expected to generate 2.42 times less return on investment than IShares High. But when comparing it to its historical volatility, Forstrong Global Income is 1.89 times less risky than IShares High. It trades about 0.26 of its potential returns per unit of risk. iShares High Dividend is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,242 in iShares High Dividend on December 11, 2024 and sell it today you would earn a total of 286.00 from holding iShares High Dividend or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forstrong Global Income vs. iShares High Dividend
Performance |
| Timeline |
| Forstrong Global Income |
| iShares High Dividend |
Forstrong Global and IShares High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and IShares High
The main advantage of trading using opposite Forstrong Global and IShares High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, IShares High 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 High will offset losses from the drop in IShares High's long position.| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. NBI High Yield | Forstrong Global vs. NBI Unconstrained Fixed |
| IShares High vs. iShares Dividend Growers | IShares High vs. iShares MSCI Min | IShares High vs. iShares MSCI Min | IShares High vs. iShares MSCI Min |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |