Correlation Between IShares Edge and IShares Covered
Can any of the company-specific risk be diversified away by investing in both IShares Edge and IShares Covered 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 Edge and IShares Covered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares Edge MSCI and IShares Covered Bond, you can compare the effects of market volatilities on IShares Edge and IShares Covered 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 Edge with a short position of IShares Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Edge and IShares Covered.
Diversification Opportunities for IShares Edge and IShares Covered
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares Edge MSCI and IShares Covered Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Covered Bond and IShares Edge 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 Edge MSCI are associated (or correlated) with IShares Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Covered Bond has no effect on the direction of IShares Edge i.e., IShares Edge and IShares Covered go up and down completely randomly.
Pair Corralation between IShares Edge and IShares Covered
If you would invest (100.00) in IShares Covered Bond on August 27, 2024 and sell it today you would earn a total of 100.00 from holding IShares Covered Bond or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IShares Edge MSCI vs. IShares Covered Bond
Performance |
| Timeline |
| IShares Edge MSCI |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IShares Covered Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Edge and IShares Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Edge and IShares Covered
The main advantage of trading using opposite IShares Edge and IShares Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Edge position performs unexpectedly, IShares Covered 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 Covered will offset losses from the drop in IShares Covered's long position.| IShares Edge vs. iShares MSCI Japan | IShares Edge vs. iShares JP Morgan | IShares Edge vs. iShares MSCI Europe | IShares Edge vs. iShares Nasdaq Biotechnology |
| IShares Covered vs. iShares MSCI Japan | IShares Covered vs. iShares JP Morgan | IShares Covered vs. iShares MSCI Europe | IShares Covered vs. iShares Nasdaq Biotechnology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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