Correlation Between IShares Trust and DBJA
Can any of the company-specific risk be diversified away by investing in both IShares Trust and DBJA 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 Trust and DBJA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and DBJA, you can compare the effects of market volatilities on IShares Trust and DBJA 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 Trust with a short position of DBJA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and DBJA.
Diversification Opportunities for IShares Trust and DBJA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and DBJA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and DBJA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBJA and IShares Trust 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 Trust are associated (or correlated) with DBJA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBJA has no effect on the direction of IShares Trust i.e., IShares Trust and DBJA go up and down completely randomly.
Pair Corralation between IShares Trust and DBJA
If you would invest 3,112 in iShares Trust on August 31, 2024 and sell it today you would earn a total of 76.00 from holding iShares Trust or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
iShares Trust vs. DBJA
Performance |
| Timeline |
| iShares Trust |
| DBJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Trust and DBJA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and DBJA
The main advantage of trading using opposite IShares Trust and DBJA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, DBJA 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 DBJA will offset losses from the drop in DBJA's long position.| IShares Trust vs. Prime Medicine, Common | IShares Trust vs. Harbor ETF Trust | IShares Trust vs. IQ Healthy Hearts | IShares Trust vs. DBX ETF Trust |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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