Correlation Between Blockchain Technologies and IShares Small
Can any of the company-specific risk be diversified away by investing in both Blockchain Technologies and IShares Small 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 Blockchain Technologies and IShares Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Technologies ETF and iShares Small Cap, you can compare the effects of market volatilities on Blockchain Technologies and IShares Small 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 Blockchain Technologies with a short position of IShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Technologies and IShares Small.
Diversification Opportunities for Blockchain Technologies and IShares Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blockchain and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Technologies ETF and iShares Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Small Cap and Blockchain Technologies 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 Blockchain Technologies ETF are associated (or correlated) with IShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Small Cap has no effect on the direction of Blockchain Technologies i.e., Blockchain Technologies and IShares Small go up and down completely randomly.
Pair Corralation between Blockchain Technologies and IShares Small
Assuming the 90 days trading horizon Blockchain Technologies ETF is expected to generate 1.96 times more return on investment than IShares Small. However, Blockchain Technologies is 1.96 times more volatile than iShares Small Cap. It trades about 0.12 of its potential returns per unit of risk. iShares Small Cap is currently generating about 0.11 per unit of risk. If you would invest 966.00 in Blockchain Technologies ETF on August 26, 2024 and sell it today you would earn a total of 1,114 from holding Blockchain Technologies ETF or generate 115.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blockchain Technologies ETF vs. iShares Small Cap
Performance |
| Timeline |
| Blockchain Technologies |
| iShares Small Cap |
Blockchain Technologies and IShares Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Technologies and IShares Small
The main advantage of trading using opposite Blockchain Technologies and IShares Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Technologies position performs unexpectedly, IShares Small 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 Small will offset losses from the drop in IShares Small's long position.| Blockchain Technologies vs. Global X Big | Blockchain Technologies vs. Evolve Automobile Innovation | Blockchain Technologies vs. Evolve E Gaming Index | Blockchain Technologies vs. Evolve Cyber Security |
| IShares Small vs. iShares SPTSX Small | IShares Small vs. iShares Canadian Value | IShares Small vs. iShares Canadian Growth | IShares Small vs. iShares SPTSX Completion |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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