Correlation Between IShares Currency and IShares Evolved
Can any of the company-specific risk be diversified away by investing in both IShares Currency and IShares Evolved 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 Currency and IShares Evolved into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Currency Hedged and iShares Evolved Discretionary, you can compare the effects of market volatilities on IShares Currency and IShares Evolved 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 Currency with a short position of IShares Evolved. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Currency and IShares Evolved.
Diversification Opportunities for IShares Currency and IShares Evolved
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Currency Hedged and iShares Evolved Discretionary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Evolved Disc and IShares Currency 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 Currency Hedged are associated (or correlated) with IShares Evolved. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Evolved Disc has no effect on the direction of IShares Currency i.e., IShares Currency and IShares Evolved go up and down completely randomly.
Pair Corralation between IShares Currency and IShares Evolved
Given the investment horizon of 90 days IShares Currency is expected to generate 6.53 times less return on investment than IShares Evolved. In addition to that, IShares Currency is 1.04 times more volatile than iShares Evolved Discretionary. It trades about 0.02 of its total potential returns per unit of risk. iShares Evolved Discretionary is currently generating about 0.16 per unit of volatility. If you would invest 4,739 in iShares Evolved Discretionary on September 2, 2024 and sell it today you would earn a total of 846.00 from holding iShares Evolved Discretionary or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Currency Hedged vs. iShares Evolved Discretionary
Performance |
| Timeline |
| iShares Currency Hedged |
| iShares Evolved Disc |
IShares Currency and IShares Evolved Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Currency and IShares Evolved
The main advantage of trading using opposite IShares Currency and IShares Evolved positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Currency position performs unexpectedly, IShares Evolved 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 Evolved will offset losses from the drop in IShares Evolved's long position.| IShares Currency vs. iShares Currency Hedged | IShares Currency vs. iShares MSCI Intl | IShares Currency vs. iShares Currency Hedged |
| IShares Evolved vs. iShares Evolved Technology | IShares Evolved vs. iShares Global Consumer | IShares Evolved vs. iShares ESG Aware | IShares Evolved vs. iShares Currency Hedged |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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