Correlation Between IShares Global and US Global
Can any of the company-specific risk be diversified away by investing in both IShares Global and US Global 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 Global and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Clean and US Global Jets, you can compare the effects of market volatilities on IShares Global and US Global 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 Global with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and US Global.
Diversification Opportunities for IShares Global and US Global
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and JETS is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Clean and US Global Jets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Jets and IShares Global 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 Global Clean are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Jets has no effect on the direction of IShares Global i.e., IShares Global and US Global go up and down completely randomly.
Pair Corralation between IShares Global and US Global
Given the investment horizon of 90 days iShares Global Clean is expected to under-perform the US Global. In addition to that, IShares Global is 1.15 times more volatile than US Global Jets. It trades about -0.18 of its total potential returns per unit of risk. US Global Jets is currently generating about 0.16 per unit of volatility. If you would invest 2,264 in US Global Jets on August 24, 2024 and sell it today you would earn a total of 133.00 from holding US Global Jets or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Clean vs. US Global Jets
Performance |
| Timeline |
| iShares Global Clean |
| US Global Jets |
IShares Global and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and US Global
The main advantage of trading using opposite IShares Global and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| IShares Global vs. Invesco Solar ETF | IShares Global vs. First Trust NASDAQ | IShares Global vs. Invesco WilderHill Clean | IShares Global vs. Global X Lithium |
| US Global vs. Invesco Solar ETF | US Global vs. iShares Global Clean | US Global vs. iShares Semiconductor ETF | US Global vs. Amplify ETF Trust |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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