Correlation Between IShares Utilities and LHA Market
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and LHA Market 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 Utilities and LHA Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and LHA Market State, you can compare the effects of market volatilities on IShares Utilities and LHA Market 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 Utilities with a short position of LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and LHA Market.
Diversification Opportunities for IShares Utilities and LHA Market
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and LHA is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State and IShares Utilities 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 Utilities ETF are associated (or correlated) with LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of IShares Utilities i.e., IShares Utilities and LHA Market go up and down completely randomly.
Pair Corralation between IShares Utilities and LHA Market
Considering the 90-day investment horizon iShares Utilities ETF is expected to generate 1.79 times more return on investment than LHA Market. However, IShares Utilities is 1.79 times more volatile than LHA Market State. It trades about 0.09 of its potential returns per unit of risk. LHA Market State is currently generating about -0.05 per unit of risk. If you would invest 10,157 in iShares Utilities ETF on August 26, 2024 and sell it today you would earn a total of 207.00 from holding iShares Utilities ETF or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. LHA Market State
Performance |
| Timeline |
| iShares Utilities ETF |
| LHA Market State |
IShares Utilities and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and LHA Market
The main advantage of trading using opposite IShares Utilities and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares Consumer Discretionary | IShares Utilities vs. iShares Consumer Staples | IShares Utilities vs. iShares Telecommunications ETF |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |