Correlation Between IShares Core and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core SP and iShares Trust, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IShares Trust.
Diversification Opportunities for IShares Core and IShares Trust
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 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 Core i.e., IShares Core and IShares Trust go up and down completely randomly.
Pair Corralation between IShares Core and IShares Trust
Considering the 90-day investment horizon iShares Core SP is expected to generate 3.71 times more return on investment than IShares Trust. However, IShares Core is 3.71 times more volatile than iShares Trust. It trades about 0.14 of its potential returns per unit of risk. iShares Trust is currently generating about 0.17 per unit of risk. If you would invest 60,159 in iShares Core SP on September 12, 2024 and sell it today you would earn a total of 900.00 from holding iShares Core SP or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. iShares Trust
Performance |
| Timeline |
| iShares Core SP |
| iShares Trust |
IShares Core and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IShares Trust
The main advantage of trading using opposite IShares Core and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. Vanguard SP 500 | IShares Core vs. Vanguard Real Estate | IShares Core vs. Vanguard Total Bond | IShares Core vs. Vanguard High Dividend |
| IShares Trust vs. Vanguard Total Stock | IShares Trust vs. SPDR SP 500 | IShares Trust vs. iShares Core SP | IShares Trust vs. Vanguard Total Bond |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |