Correlation Between IShares 25 and MAAX
Can any of the company-specific risk be diversified away by investing in both IShares 25 and MAAX 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 25 and MAAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 25 Year and MAAX, you can compare the effects of market volatilities on IShares 25 and MAAX 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 25 with a short position of MAAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 25 and MAAX.
Diversification Opportunities for IShares 25 and MAAX
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and MAAX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding iShares 25 Year and MAAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAAX and IShares 25 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 25 Year are associated (or correlated) with MAAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAAX has no effect on the direction of IShares 25 i.e., IShares 25 and MAAX go up and down completely randomly.
Pair Corralation between IShares 25 and MAAX
If you would invest 2,072 in MAAX on August 26, 2024 and sell it today you would earn a total of 0.00 from holding MAAX or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
iShares 25 Year vs. MAAX
Performance |
| Timeline |
| iShares 25 Year |
| MAAX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares 25 and MAAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 25 and MAAX
The main advantage of trading using opposite IShares 25 and MAAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 25 position performs unexpectedly, MAAX 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 MAAX will offset losses from the drop in MAAX's long position.| IShares 25 vs. iShares Treasury Floating | IShares 25 vs. Schwab Long Term Treasury | IShares 25 vs. iShares iBonds Dec | IShares 25 vs. iShares iBonds Dec |
| MAAX vs. VanEck Short High | MAAX vs. VanEck Long Muni | MAAX vs. VanEck CEF Municipal | MAAX vs. First Trust Municipal |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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