Correlation Between IShares Core and LHA Market
Can any of the company-specific risk be diversified away by investing in both IShares Core and LHA Market 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 LHA Market 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 LHA Market State, you can compare the effects of market volatilities on IShares Core and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and LHA Market.
Diversification Opportunities for IShares Core and LHA Market
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and LHA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of IShares Core i.e., IShares Core and LHA Market go up and down completely randomly.
Pair Corralation between IShares Core and LHA Market
Considering the 90-day investment horizon iShares Core SP is expected to generate 1.43 times more return on investment than LHA Market. However, IShares Core is 1.43 times more volatile than LHA Market State. It trades about 0.13 of its potential returns per unit of risk. LHA Market State is currently generating about -0.09 per unit of risk. If you would invest 52,633 in iShares Core SP on August 29, 2024 and sell it today you would earn a total of 7,549 from holding iShares Core SP or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. LHA Market State
Performance |
| Timeline |
| iShares Core SP |
| LHA Market State |
IShares Core and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and LHA Market
The main advantage of trading using opposite IShares Core and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market'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 |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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