Correlation Between IShares Oil and IShares Oil
Can any of the company-specific risk be diversified away by investing in both IShares Oil and IShares Oil 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 Oil and IShares Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Oil Gas and iShares Oil Equipment, you can compare the effects of market volatilities on IShares Oil and IShares Oil 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 Oil with a short position of IShares Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Oil and IShares Oil.
Diversification Opportunities for IShares Oil and IShares Oil
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Oil Gas and iShares Oil Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Oil Equipment and IShares Oil 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 Oil Gas are associated (or correlated) with IShares Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Oil Equipment has no effect on the direction of IShares Oil i.e., IShares Oil and IShares Oil go up and down completely randomly.
Pair Corralation between IShares Oil and IShares Oil
Considering the 90-day investment horizon IShares Oil is expected to generate 1.24 times less return on investment than IShares Oil. But when comparing it to its historical volatility, iShares Oil Gas is 1.54 times less risky than IShares Oil. It trades about 0.27 of its potential returns per unit of risk. iShares Oil Equipment is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,970 in iShares Oil Equipment on August 28, 2024 and sell it today you would earn a total of 209.00 from holding iShares Oil Equipment or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Oil Gas vs. iShares Oil Equipment
Performance |
| Timeline |
| iShares Oil Gas |
| iShares Oil Equipment |
IShares Oil and IShares Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Oil and IShares Oil
The main advantage of trading using opposite IShares Oil and IShares Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Oil position performs unexpectedly, IShares Oil 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 IShares Oil will offset losses from the drop in IShares Oil's long position.| IShares Oil vs. EA Series Trust | IShares Oil vs. EA Series Trust | IShares Oil vs. Rumble Inc | IShares Oil vs. EA Series Trust |
| IShares Oil vs. EA Series Trust | IShares Oil vs. EA Series Trust | IShares Oil vs. Rumble Inc | IShares Oil vs. EA Series 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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