Correlation Between International Business and IShares Dow
Can any of the company-specific risk be diversified away by investing in both International Business and IShares Dow 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 International Business and IShares Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and iShares Dow Jones, you can compare the effects of market volatilities on International Business and IShares Dow 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 International Business with a short position of IShares Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and IShares Dow.
Diversification Opportunities for International Business and IShares Dow
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and IShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and iShares Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dow Jones and International Business 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 International Business Machines are associated (or correlated) with IShares Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dow Jones has no effect on the direction of International Business i.e., International Business and IShares Dow go up and down completely randomly.
Pair Corralation between International Business and IShares Dow
If you would invest 7,364 in iShares Dow Jones on September 1, 2024 and sell it today you would earn a total of 142.00 from holding iShares Dow Jones or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 21.74% |
| Values | Daily Returns |
International Business Machine vs. iShares Dow Jones
Performance |
| Timeline |
| International Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares Dow Jones |
International Business and IShares Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and IShares Dow
The main advantage of trading using opposite International Business and IShares Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, IShares Dow 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 Dow will offset losses from the drop in IShares Dow's long position.| International Business vs. Zoom Video Communications | International Business vs. Albion Technology General | International Business vs. TechnipFMC PLC | International Business vs. Universal Display Corp |
| IShares Dow vs. Vanguard FTSE Developed | IShares Dow vs. Leverage Shares 2x | IShares Dow vs. Amundi Index Solutions | IShares Dow vs. Amundi Index Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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