Correlation Between IShares Trust and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Trust and IShares Trust 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 Trust and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and iShares Trust , you can compare the effects of market volatilities on IShares Trust and IShares Trust 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 Trust with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and IShares Trust.
Diversification Opportunities for IShares Trust and IShares Trust
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and IShares Trust 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 Trust are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares Trust i.e., IShares Trust and IShares Trust go up and down completely randomly.
Pair Corralation between IShares Trust and IShares Trust
Assuming the 90 days trading horizon IShares Trust is expected to generate 3.96 times less return on investment than IShares Trust. But when comparing it to its historical volatility, iShares Trust is 2.09 times less risky than IShares Trust. It trades about 0.14 of its potential returns per unit of risk. iShares Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 316,294 in iShares Trust on August 28, 2024 and sell it today you would earn a total of 52,029 from holding iShares Trust or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. iShares Trust
Performance |
| Timeline |
| iShares Trust |
| iShares Trust |
IShares Trust and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and IShares Trust
The main advantage of trading using opposite IShares Trust and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Tax Managed Funds | IShares Trust vs. Vanguard International Equity |
| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Tax Managed Funds | IShares Trust vs. Vanguard International Equity |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |