Correlation Between IShares SP and 6 Meridian
Can any of the company-specific risk be diversified away by investing in both IShares SP and 6 Meridian 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 SP and 6 Meridian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and 6 Meridian Mega, you can compare the effects of market volatilities on IShares SP and 6 Meridian 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 SP with a short position of 6 Meridian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and 6 Meridian.
Diversification Opportunities for IShares SP and 6 Meridian
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SIXA is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and 6 Meridian Mega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 6 Meridian Mega and IShares SP 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 SP 500 are associated (or correlated) with 6 Meridian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 6 Meridian Mega has no effect on the direction of IShares SP i.e., IShares SP and 6 Meridian go up and down completely randomly.
Pair Corralation between IShares SP and 6 Meridian
Considering the 90-day investment horizon iShares SP 500 is expected to generate 1.22 times more return on investment than 6 Meridian. However, IShares SP is 1.22 times more volatile than 6 Meridian Mega. It trades about 0.25 of its potential returns per unit of risk. 6 Meridian Mega is currently generating about 0.14 per unit of risk. If you would invest 19,731 in iShares SP 500 on August 28, 2024 and sell it today you would earn a total of 789.00 from holding iShares SP 500 or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. 6 Meridian Mega
Performance |
| Timeline |
| iShares SP 500 |
| 6 Meridian Mega |
IShares SP and 6 Meridian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and 6 Meridian
The main advantage of trading using opposite IShares SP and 6 Meridian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, 6 Meridian 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 6 Meridian will offset losses from the drop in 6 Meridian's long position.| IShares SP vs. iShares SP 500 | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Mid Cap |
| 6 Meridian vs. BlackRock ETF Trust | 6 Meridian vs. Rbb Fund | 6 Meridian vs. Virtus ETF Trust | 6 Meridian vs. Amplify CWP Enhanced |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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