Correlation Between IShares Core and FSMO
Can any of the company-specific risk be diversified away by investing in both IShares Core and FSMO 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 FSMO 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 FSMO, you can compare the effects of market volatilities on IShares Core and FSMO 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 FSMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and FSMO.
Diversification Opportunities for IShares Core and FSMO
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and FSMO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and FSMO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSMO 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 FSMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSMO has no effect on the direction of IShares Core i.e., IShares Core and FSMO go up and down completely randomly.
Pair Corralation between IShares Core and FSMO
If you would invest 5,052 in iShares Core SP on August 26, 2024 and sell it today you would earn a total of 1,632 from holding iShares Core SP or generate 32.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
iShares Core SP vs. FSMO
Performance |
| Timeline |
| iShares Core SP |
| FSMO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Core and FSMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and FSMO
The main advantage of trading using opposite IShares Core and FSMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, FSMO 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 FSMO will offset losses from the drop in FSMO'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 |
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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