Correlation Between IShares Corp and LG Clean
Can any of the company-specific risk be diversified away by investing in both IShares Corp and LG Clean 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 Corp and LG Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Corp Bond and LG Clean Water, you can compare the effects of market volatilities on IShares Corp and LG Clean 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 Corp with a short position of LG Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Corp and LG Clean.
Diversification Opportunities for IShares Corp and LG Clean
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and GLUG is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding iShares Corp Bond and LG Clean Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Clean Water and IShares Corp 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 Corp Bond are associated (or correlated) with LG Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Clean Water has no effect on the direction of IShares Corp i.e., IShares Corp and LG Clean go up and down completely randomly.
Pair Corralation between IShares Corp and LG Clean
Assuming the 90 days trading horizon IShares Corp is expected to generate 1.62 times less return on investment than LG Clean. But when comparing it to its historical volatility, iShares Corp Bond is 5.37 times less risky than LG Clean. It trades about 0.11 of its potential returns per unit of risk. LG Clean Water is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,367 in LG Clean Water on October 13, 2024 and sell it today you would earn a total of 200.00 from holding LG Clean Water or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
iShares Corp Bond vs. LG Clean Water
Performance |
| Timeline |
| iShares Corp Bond |
| LG Clean Water |
IShares Corp and LG Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Corp and LG Clean
The main advantage of trading using opposite IShares Corp and LG Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Corp position performs unexpectedly, LG Clean 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 LG Clean will offset losses from the drop in LG Clean's long position.| IShares Corp vs. iShares Corp Bond | IShares Corp vs. iShares Emerging Asia | IShares Corp vs. iShares MSCI Global | IShares Corp vs. iShares VII PLC |
| LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. VanEck Solana ETN | LG Clean vs. iShares Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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