Correlation Between IShares Core and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Core and IShares Global 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 IShares Global 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 iShares Global Consumer, you can compare the effects of market volatilities on IShares Core and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IShares Global.
Diversification Opportunities for IShares Core and IShares Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and iShares Global Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Consumer 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Consumer has no effect on the direction of IShares Core i.e., IShares Core and IShares Global go up and down completely randomly.
Pair Corralation between IShares Core and IShares Global
Assuming the 90 days trading horizon iShares Core SP is expected to generate 1.16 times more return on investment than IShares Global. However, IShares Core is 1.16 times more volatile than iShares Global Consumer. It trades about 0.2 of its potential returns per unit of risk. iShares Global Consumer is currently generating about 0.03 per unit of risk. If you would invest 5,527 in iShares Core SP on August 25, 2024 and sell it today you would earn a total of 574.00 from holding iShares Core SP or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. iShares Global Consumer
Performance |
| Timeline |
| iShares Core SP |
| iShares Global Consumer |
IShares Core and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IShares Global
The main advantage of trading using opposite IShares Core and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| IShares Core vs. iShares MSCI Emerging | IShares Core vs. iShares Global Aggregate | IShares Core vs. iShares CoreSP MidCap | IShares Core vs. iShares SP 500 |
| IShares Global vs. BetaShares Global Government | IShares Global vs. BetaShares Geared Australian | IShares Global vs. Global X Semiconductor | IShares Global vs. iShares UBS Government |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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