Correlation Between IShares Expanded and REX FANG
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and REX FANG 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 Expanded and REX FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech Software and REX FANG Innovation, you can compare the effects of market volatilities on IShares Expanded and REX FANG 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 Expanded with a short position of REX FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and REX FANG.
Diversification Opportunities for IShares Expanded and REX FANG
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and REX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and REX FANG Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX FANG Innovation and IShares Expanded 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 Expanded Tech Software are associated (or correlated) with REX FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX FANG Innovation has no effect on the direction of IShares Expanded i.e., IShares Expanded and REX FANG go up and down completely randomly.
Pair Corralation between IShares Expanded and REX FANG
Considering the 90-day investment horizon iShares Expanded Tech Software is expected to generate 1.53 times more return on investment than REX FANG. However, IShares Expanded is 1.53 times more volatile than REX FANG Innovation. It trades about 0.44 of its potential returns per unit of risk. REX FANG Innovation is currently generating about 0.09 per unit of risk. If you would invest 9,220 in iShares Expanded Tech Software on August 26, 2024 and sell it today you would earn a total of 1,384 from holding iShares Expanded Tech Software or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. REX FANG Innovation
Performance |
| Timeline |
| iShares Expanded Tech |
| REX FANG Innovation |
IShares Expanded and REX FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and REX FANG
The main advantage of trading using opposite IShares Expanded and REX FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, REX FANG 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 REX FANG will offset losses from the drop in REX FANG's long position.| IShares Expanded vs. First Trust Exchange Traded | IShares Expanded vs. Ultimus Managers Trust | IShares Expanded vs. Horizon Kinetics Medical | IShares Expanded vs. Harbor Health Care |
| REX FANG vs. Invesco DWA Utilities | REX FANG vs. Invesco Dynamic Large | REX FANG vs. Invesco Dynamic Large | REX FANG vs. HUMANA INC |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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