Correlation Between IShares Core and Listed Funds
Can any of the company-specific risk be diversified away by investing in both IShares Core and Listed Funds 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 Core and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Listed Funds Trust, you can compare the effects of market volatilities on IShares Core and Listed Funds 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 Core with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Listed Funds.
Diversification Opportunities for IShares Core and Listed Funds
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Listed is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and IShares Core 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 Core SP are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of IShares Core i.e., IShares Core and Listed Funds go up and down completely randomly.
Pair Corralation between IShares Core and Listed Funds
Given the investment horizon of 90 days iShares Core SP is expected to generate 1.49 times more return on investment than Listed Funds. However, IShares Core is 1.49 times more volatile than Listed Funds Trust. It trades about 0.11 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.09 per unit of risk. If you would invest 8,126 in iShares Core SP on November 29, 2024 and sell it today you would earn a total of 5,517 from holding iShares Core SP or generate 67.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Listed Funds Trust
Performance |
| Timeline |
| iShares Core SP |
| Listed Funds Trust |
IShares Core and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Listed Funds
The main advantage of trading using opposite IShares Core and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares Russell Top | IShares Core vs. iShares Core MSCI |
| Listed Funds vs. Pacer Global Cash | Listed Funds vs. SmartETFs Dividend Builder | Listed Funds vs. FT Cboe Vest | Listed Funds vs. Franklin International Low |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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