Correlation Between IShares Core and FundX ETF
Can any of the company-specific risk be diversified away by investing in both IShares Core and FundX ETF 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 FundX ETF 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 FundX ETF, you can compare the effects of market volatilities on IShares Core and FundX ETF 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 FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and FundX ETF.
Diversification Opportunities for IShares Core and FundX ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and FundX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX ETF 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 FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of IShares Core i.e., IShares Core and FundX ETF go up and down completely randomly.
Pair Corralation between IShares Core and FundX ETF
Given the investment horizon of 90 days iShares Core SP is expected to generate 1.06 times more return on investment than FundX ETF. However, IShares Core is 1.06 times more volatile than FundX ETF. It trades about 0.14 of its potential returns per unit of risk. FundX ETF is currently generating about 0.13 per unit of risk. If you would invest 12,401 in iShares Core SP on November 2, 2024 and sell it today you would earn a total of 1,978 from holding iShares Core SP or generate 15.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.04% |
Values | Daily Returns |
iShares Core SP vs. FundX ETF
Performance |
Timeline |
iShares Core SP |
FundX ETF |
IShares Core and FundX ETF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and FundX ETF
The main advantage of trading using opposite IShares Core and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF's 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 |
FundX ETF vs. Freedom Day Dividend | FundX ETF vs. Franklin Templeton ETF | FundX ETF vs. iShares MSCI China | FundX ETF vs. Tidal Trust II |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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