Correlation Between IShares Core and Exchange Listed
Can any of the company-specific risk be diversified away by investing in both IShares Core and Exchange Listed 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 Exchange Listed 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 Exchange Listed Funds, you can compare the effects of market volatilities on IShares Core and Exchange Listed 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 Exchange Listed. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Exchange Listed.
Diversification Opportunities for IShares Core and Exchange Listed
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Exchange is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Exchange Listed Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Listed Funds 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 Exchange Listed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Listed Funds has no effect on the direction of IShares Core i.e., IShares Core and Exchange Listed go up and down completely randomly.
Pair Corralation between IShares Core and Exchange Listed
Considering the 90-day investment horizon iShares Core SP is expected to generate 1.5 times more return on investment than Exchange Listed. However, IShares Core is 1.5 times more volatile than Exchange Listed Funds. It trades about 0.19 of its potential returns per unit of risk. Exchange Listed Funds is currently generating about 0.16 per unit of risk. If you would invest 6,166 in iShares Core SP on August 26, 2024 and sell it today you would earn a total of 518.00 from holding iShares Core SP or generate 8.4% 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. Exchange Listed Funds
Performance |
| Timeline |
| iShares Core SP |
| Exchange Listed Funds |
IShares Core and Exchange Listed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Exchange Listed
The main advantage of trading using opposite IShares Core and Exchange Listed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Exchange Listed 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 Exchange Listed will offset losses from the drop in Exchange Listed'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 |
| Exchange Listed vs. Vanguard Mid Cap Index | Exchange Listed vs. Vanguard Extended Market | Exchange Listed vs. iShares Core SP | Exchange Listed vs. SPDR SP MIDCAP |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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