Correlation Between IShares and Tradr 2X
Can any of the company-specific risk be diversified away by investing in both IShares and Tradr 2X 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 and Tradr 2X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and Tradr 2X Long, you can compare the effects of market volatilities on IShares and Tradr 2X 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 with a short position of Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and Tradr 2X.
Diversification Opportunities for IShares and Tradr 2X
Very good diversification
The 3 months correlation between IShares and Tradr is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long and IShares 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 are associated (or correlated) with Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of IShares i.e., IShares and Tradr 2X go up and down completely randomly.
Pair Corralation between IShares and Tradr 2X
Given the investment horizon of 90 days IShares is expected to generate 0.23 times more return on investment than Tradr 2X. However, IShares is 4.4 times less risky than Tradr 2X. It trades about 0.08 of its potential returns per unit of risk. Tradr 2X Long is currently generating about 0.01 per unit of risk. If you would invest 4,766 in IShares on August 30, 2024 and sell it today you would earn a total of 1,535 from holding IShares or generate 32.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 14.76% |
| Values | Daily Returns |
IShares vs. Tradr 2X Long
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tradr 2X Long |
IShares and Tradr 2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and Tradr 2X
The main advantage of trading using opposite IShares and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X's long position.| IShares vs. VanEck Merk Gold | IShares vs. Goldman Sachs Physical | IShares vs. GraniteShares Gold Trust | IShares vs. iShares Gold Trust |
| Tradr 2X vs. ABIVAX Socit Anonyme | Tradr 2X vs. Morningstar Unconstrained Allocation | Tradr 2X vs. SPACE | Tradr 2X vs. Knife River |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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