Correlation Between IShares Trust and Themes Cash
Can any of the company-specific risk be diversified away by investing in both IShares Trust and Themes Cash 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 Themes Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Themes Cash Flow, you can compare the effects of market volatilities on IShares Trust and Themes Cash 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 Themes Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Themes Cash.
Diversification Opportunities for IShares Trust and Themes Cash
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Themes is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Themes Cash Flow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Cash Flow 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 Themes Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Cash Flow has no effect on the direction of IShares Trust i.e., IShares Trust and Themes Cash go up and down completely randomly.
Pair Corralation between IShares Trust and Themes Cash
Given the investment horizon of 90 days IShares Trust is expected to generate 1.6 times less return on investment than Themes Cash. But when comparing it to its historical volatility, iShares Trust is 2.08 times less risky than Themes Cash. It trades about 0.34 of its potential returns per unit of risk. Themes Cash Flow is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,023 in Themes Cash Flow on September 1, 2024 and sell it today you would earn a total of 183.00 from holding Themes Cash Flow or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Trust vs. Themes Cash Flow
Performance |
| Timeline |
| iShares Trust |
| Themes Cash Flow |
IShares Trust and Themes Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Themes Cash
The main advantage of trading using opposite IShares Trust and Themes Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Themes Cash 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 Themes Cash will offset losses from the drop in Themes Cash'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 |
| Themes Cash vs. Vanguard Total Stock | Themes Cash vs. SPDR SP 500 | Themes Cash vs. iShares Core SP | Themes Cash vs. Vanguard Total Bond |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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