Correlation Between IShares Trust and IShares
Can any of the company-specific risk be diversified away by investing in both IShares Trust and IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and IShares, you can compare the effects of market volatilities on IShares Trust and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and IShares.
Diversification Opportunities for IShares Trust and IShares
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of IShares Trust i.e., IShares Trust and IShares go up and down completely randomly.
Pair Corralation between IShares Trust and IShares
Given the investment horizon of 90 days iShares Trust is expected to generate 0.59 times more return on investment than IShares. However, iShares Trust is 1.69 times less risky than IShares. It trades about 0.17 of its potential returns per unit of risk. IShares is currently generating about 0.03 per unit of risk. If you would invest 2,402 in iShares Trust on September 3, 2024 and sell it today you would earn a total of 786.00 from holding iShares Trust or generate 32.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.8% |
| Values | Daily Returns |
iShares Trust vs. IShares
Performance |
| Timeline |
| iShares Trust |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Trust and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and IShares
The main advantage of trading using opposite IShares Trust and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| IShares Trust vs. Humana Inc | IShares Trust vs. iPath Series B | IShares Trust vs. Global X Funds | IShares Trust vs. Ocean Park High |
| IShares vs. iShares MSCI Intl | IShares vs. iShares MSCI Intl | IShares vs. iShares Currency Hedged | IShares vs. iShares Edge 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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