Correlation Between IShares Oil and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both IShares Oil and Macquarie ETF 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 Macquarie ETF 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 Macquarie ETF Trust, you can compare the effects of market volatilities on IShares Oil and Macquarie ETF 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 Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Oil and Macquarie ETF.
Diversification Opportunities for IShares Oil and Macquarie ETF
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Macquarie is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares Oil Gas and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust 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 Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of IShares Oil i.e., IShares Oil and Macquarie ETF go up and down completely randomly.
Pair Corralation between IShares Oil and Macquarie ETF
Considering the 90-day investment horizon iShares Oil Gas is expected to generate 1.01 times more return on investment than Macquarie ETF. However, IShares Oil is 1.01 times more volatile than Macquarie ETF Trust. It trades about 0.03 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.03 per unit of risk. If you would invest 7,907 in iShares Oil Gas on November 1, 2024 and sell it today you would earn a total of 1,555 from holding iShares Oil Gas or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.81% |
| Values | Daily Returns |
iShares Oil Gas vs. Macquarie ETF Trust
Performance |
| Timeline |
| iShares Oil Gas |
| Macquarie ETF Trust |
IShares Oil and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Oil and Macquarie ETF
The main advantage of trading using opposite IShares Oil and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Oil position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| IShares Oil vs. iShares Oil Equipment | IShares Oil vs. iShares Energy ETF | IShares Oil vs. Invesco Dynamic Energy | IShares Oil vs. SPDR SP Oil |
| Macquarie ETF vs. Freedom Day Dividend | Macquarie ETF vs. Franklin Templeton ETF | Macquarie ETF vs. iShares MSCI China | Macquarie ETF vs. Tidal Trust II |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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