Correlation Between IShares Core and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both IShares Core and Xtrackers Russell 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 Core and Xtrackers Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Xtrackers Russell Multifactor, you can compare the effects of market volatilities on IShares Core and Xtrackers Russell 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 Core with a short position of Xtrackers Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Xtrackers Russell.
Diversification Opportunities for IShares Core and Xtrackers Russell
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Xtrackers is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Xtrackers Russell Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell and IShares Core 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 Core SP are associated (or correlated) with Xtrackers Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell has no effect on the direction of IShares Core i.e., IShares Core and Xtrackers Russell go up and down completely randomly.
Pair Corralation between IShares Core and Xtrackers Russell
Considering the 90-day investment horizon IShares Core is expected to generate 1.1 times less return on investment than Xtrackers Russell. In addition to that, IShares Core is 1.35 times more volatile than Xtrackers Russell Multifactor. It trades about 0.1 of its total potential returns per unit of risk. Xtrackers Russell Multifactor is currently generating about 0.15 per unit of volatility. If you would invest 5,023 in Xtrackers Russell Multifactor on August 29, 2024 and sell it today you would earn a total of 796.00 from holding Xtrackers Russell Multifactor or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Xtrackers Russell Multifactor
Performance |
| Timeline |
| iShares Core SP |
| Xtrackers Russell |
IShares Core and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Xtrackers Russell
The main advantage of trading using opposite IShares Core and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Xtrackers Russell 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 Xtrackers Russell will offset losses from the drop in Xtrackers Russell's long position.| IShares Core vs. JPMorgan Fundamental Data | IShares Core vs. Vanguard Mid Cap Index | IShares Core vs. SPDR SP 400 | IShares Core vs. SPDR SP 400 |
| Xtrackers Russell vs. Vanguard Mid Cap Index | Xtrackers Russell vs. iShares Core SP | Xtrackers Russell vs. SPDR SP MIDCAP | Xtrackers Russell vs. Vanguard SP Mid Cap |
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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