Correlation Between IShares Trust and SWP Growth
Can any of the company-specific risk be diversified away by investing in both IShares Trust and SWP Growth 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 Trust and SWP Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and SWP Growth Income, you can compare the effects of market volatilities on IShares Trust and SWP Growth 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 Trust with a short position of SWP Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and SWP Growth.
Diversification Opportunities for IShares Trust and SWP Growth
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and SWP is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and SWP Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWP Growth Income and IShares Trust 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 Trust are associated (or correlated) with SWP Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWP Growth Income has no effect on the direction of IShares Trust i.e., IShares Trust and SWP Growth go up and down completely randomly.
Pair Corralation between IShares Trust and SWP Growth
Given the investment horizon of 90 days IShares Trust is expected to generate 1.13 times less return on investment than SWP Growth. In addition to that, IShares Trust is 1.69 times more volatile than SWP Growth Income. It trades about 0.09 of its total potential returns per unit of risk. SWP Growth Income is currently generating about 0.18 per unit of volatility. If you would invest 2,497 in SWP Growth Income on August 28, 2024 and sell it today you would earn a total of 134.00 from holding SWP Growth Income or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 21.05% |
| Values | Daily Returns |
iShares Trust vs. SWP Growth Income
Performance |
| Timeline |
| iShares Trust |
| SWP Growth Income |
IShares Trust and SWP Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and SWP Growth
The main advantage of trading using opposite IShares Trust and SWP Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, SWP Growth 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 SWP Growth will offset losses from the drop in SWP Growth's long position.| IShares Trust vs. First Trust Exchange Traded | IShares Trust vs. Ultimus Managers Trust | IShares Trust vs. Horizon Kinetics Medical | IShares Trust vs. Harbor Health Care |
| SWP Growth vs. Tidal Trust II | SWP Growth vs. Tidal Trust II | SWP Growth vs. First Trust Dorsey | SWP Growth vs. Direxion Daily META |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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