Correlation Between IShares SPASX and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares SPASX and IShares Global 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 SPASX and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPASX Small and iShares Global Aggregate, you can compare the effects of market volatilities on IShares SPASX and IShares Global 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 SPASX with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPASX and IShares Global.
Diversification Opportunities for IShares SPASX and IShares Global
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPASX Small and iShares Global Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Aggregate and IShares SPASX 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 SPASX Small are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Aggregate has no effect on the direction of IShares SPASX i.e., IShares SPASX and IShares Global go up and down completely randomly.
Pair Corralation between IShares SPASX and IShares Global
Assuming the 90 days trading horizon iShares SPASX Small is expected to generate 3.45 times more return on investment than IShares Global. However, IShares SPASX is 3.45 times more volatile than iShares Global Aggregate. It trades about 0.08 of its potential returns per unit of risk. iShares Global Aggregate is currently generating about 0.19 per unit of risk. If you would invest 484.00 in iShares SPASX Small on September 1, 2024 and sell it today you would earn a total of 6.00 from holding iShares SPASX Small or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPASX Small vs. iShares Global Aggregate
Performance |
| Timeline |
| iShares SPASX Small |
| iShares Global Aggregate |
IShares SPASX and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPASX and IShares Global
The main advantage of trading using opposite IShares SPASX and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPASX position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| IShares SPASX vs. iShares MSCI Emerging | IShares SPASX vs. iShares Global Aggregate | IShares SPASX vs. iShares CoreSP MidCap | IShares SPASX vs. iShares SP 500 |
| IShares Global vs. iShares MSCI Emerging | IShares Global vs. iShares CoreSP MidCap | IShares Global vs. iShares SP 500 | IShares Global vs. iShares Core MSCI |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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