Correlation Between IShares Global and ProShares Pet
Can any of the company-specific risk be diversified away by investing in both IShares Global and ProShares Pet 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 ProShares Pet 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 ProShares Pet Care, you can compare the effects of market volatilities on IShares Global and ProShares Pet 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 ProShares Pet. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and ProShares Pet.
Diversification Opportunities for IShares Global and ProShares Pet
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and ProShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Clean and ProShares Pet Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Pet Care 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 ProShares Pet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Pet Care has no effect on the direction of IShares Global i.e., IShares Global and ProShares Pet go up and down completely randomly.
Pair Corralation between IShares Global and ProShares Pet
Given the investment horizon of 90 days iShares Global Clean is expected to under-perform the ProShares Pet. In addition to that, IShares Global is 1.41 times more volatile than ProShares Pet Care. It trades about -0.06 of its total potential returns per unit of risk. ProShares Pet Care is currently generating about 0.03 per unit of volatility. If you would invest 4,974 in ProShares Pet Care on August 26, 2024 and sell it today you would earn a total of 745.00 from holding ProShares Pet Care or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Clean vs. ProShares Pet Care
Performance |
| Timeline |
| iShares Global Clean |
| ProShares Pet Care |
IShares Global and ProShares Pet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and ProShares Pet
The main advantage of trading using opposite IShares Global and ProShares Pet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, ProShares Pet 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 ProShares Pet will offset losses from the drop in ProShares Pet's long position.| IShares Global vs. SPDR Kensho New | IShares Global vs. Global X FinTech | IShares Global vs. iShares Genomics Immunology | IShares Global vs. Aquagold International |
| ProShares Pet vs. ProShares Online Retail | ProShares Pet vs. VanEck Video Gaming | ProShares Pet vs. Renaissance IPO ETF | ProShares Pet vs. Invesco Dynamic Leisure |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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