Correlation Between Strategy Shares and IShares Core
Can any of the company-specific risk be diversified away by investing in both Strategy Shares 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 Strategy Shares and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategy Shares Nasdaq and iShares Core Moderate, you can compare the effects of market volatilities on Strategy Shares 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 Strategy Shares with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and IShares Core.
Diversification Opportunities for Strategy Shares and IShares Core
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Strategy and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares Nasdaq and iShares Core Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Moderate and Strategy Shares 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 Strategy Shares Nasdaq 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 Moderate has no effect on the direction of Strategy Shares i.e., Strategy Shares and IShares Core go up and down completely randomly.
Pair Corralation between Strategy Shares and IShares Core
Given the investment horizon of 90 days Strategy Shares Nasdaq is expected to generate 1.37 times more return on investment than IShares Core. However, Strategy Shares is 1.37 times more volatile than iShares Core Moderate. It trades about 0.1 of its potential returns per unit of risk. iShares Core Moderate is currently generating about 0.1 per unit of risk. If you would invest 1,795 in Strategy Shares Nasdaq on August 30, 2024 and sell it today you would earn a total of 431.00 from holding Strategy Shares Nasdaq or generate 24.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategy Shares Nasdaq vs. iShares Core Moderate
Performance |
| Timeline |
| Strategy Shares Nasdaq |
| iShares Core Moderate |
Strategy Shares and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategy Shares and IShares Core
The main advantage of trading using opposite Strategy Shares and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares 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.| Strategy Shares vs. NEOS ETF Trust | Strategy Shares vs. First Trust Multi Asset | Strategy Shares vs. Amplify High Income | Strategy Shares vs. Global X Russell |
| IShares Core vs. NEOS ETF Trust | IShares Core vs. First Trust Multi Asset | IShares Core vs. Amplify High Income | IShares Core vs. Global X Russell |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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