Correlation Between IShares Core and FundX Aggressive
Can any of the company-specific risk be diversified away by investing in both IShares Core and FundX Aggressive 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 Aggressive 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 Aggressive ETF, you can compare the effects of market volatilities on IShares Core and FundX Aggressive 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 Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and FundX Aggressive.
Diversification Opportunities for IShares Core and FundX Aggressive
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 Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive 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 Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of IShares Core i.e., IShares Core and FundX Aggressive go up and down completely randomly.
Pair Corralation between IShares Core and FundX Aggressive
Given the investment horizon of 90 days IShares Core is expected to generate 1.04 times less return on investment than FundX Aggressive. But when comparing it to its historical volatility, iShares Core SP is 1.11 times less risky than FundX Aggressive. It trades about 0.31 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 6,816 in FundX Aggressive ETF on September 1, 2024 and sell it today you would earn a total of 463.00 from holding FundX Aggressive ETF or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Core SP vs. FundX Aggressive ETF
Performance |
| Timeline |
| iShares Core SP |
| FundX Aggressive ETF |
IShares Core and FundX Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and FundX Aggressive
The main advantage of trading using opposite IShares Core and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, FundX Aggressive 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 Aggressive will offset losses from the drop in FundX Aggressive'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 Aggressive vs. Vanguard Growth Index | FundX Aggressive vs. iShares Russell 1000 | FundX Aggressive vs. iShares SP 500 | FundX Aggressive vs. iShares Core SP |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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