Correlation Between IShares Core and Themes Natural
Can any of the company-specific risk be diversified away by investing in both IShares Core and Themes Natural 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 Themes Natural 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 Themes Natural Monopoly, you can compare the effects of market volatilities on IShares Core and Themes Natural 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 Themes Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Themes Natural.
Diversification Opportunities for IShares Core and Themes Natural
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Themes is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Themes Natural Monopoly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Natural Monopoly 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 Themes Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Natural Monopoly has no effect on the direction of IShares Core i.e., IShares Core and Themes Natural go up and down completely randomly.
Pair Corralation between IShares Core and Themes Natural
Considering the 90-day investment horizon IShares Core is expected to generate 40.64 times less return on investment than Themes Natural. But when comparing it to its historical volatility, iShares Core SP is 84.83 times less risky than Themes Natural. It trades about 0.14 of its potential returns per unit of risk. Themes Natural Monopoly is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Themes Natural Monopoly on August 30, 2024 and sell it today you would earn a total of 3,015 from holding Themes Natural Monopoly or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 61.68% |
| Values | Daily Returns |
iShares Core SP vs. Themes Natural Monopoly
Performance |
| Timeline |
| iShares Core SP |
| Themes Natural Monopoly |
IShares Core and Themes Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Themes Natural
The main advantage of trading using opposite IShares Core and Themes Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Themes Natural 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 Themes Natural will offset losses from the drop in Themes Natural's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| Themes Natural vs. JPMorgan BetaBuilders International | Themes Natural vs. JPMorgan Core Plus | Themes Natural vs. JPMorgan BetaBuilders Canada | Themes Natural vs. JPMorgan Emerging Markets |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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