Correlation Between IShares Utilities and VelocityShares
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and VelocityShares 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 VelocityShares 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 VelocityShares 3x Long, you can compare the effects of market volatilities on IShares Utilities and VelocityShares 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 VelocityShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and VelocityShares.
Diversification Opportunities for IShares Utilities and VelocityShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and VelocityShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and VelocityShares 3x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VelocityShares 3x Long 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 VelocityShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VelocityShares 3x Long has no effect on the direction of IShares Utilities i.e., IShares Utilities and VelocityShares go up and down completely randomly.
Pair Corralation between IShares Utilities and VelocityShares
If you would invest 10,119 in iShares Utilities ETF on September 1, 2024 and sell it today you would earn a total of 433.00 from holding iShares Utilities ETF or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
iShares Utilities ETF vs. VelocityShares 3x Long
Performance |
| Timeline |
| iShares Utilities ETF |
| VelocityShares 3x Long |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Utilities and VelocityShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and VelocityShares
The main advantage of trading using opposite IShares Utilities and VelocityShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, VelocityShares 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 VelocityShares will offset losses from the drop in VelocityShares' 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 |
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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