Correlation Between IShares Core and Atlas America
Can any of the company-specific risk be diversified away by investing in both IShares Core and Atlas America 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 Atlas America 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 Atlas America, you can compare the effects of market volatilities on IShares Core and Atlas America 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 Atlas America. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Atlas America.
Diversification Opportunities for IShares Core and Atlas America
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Atlas is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Atlas America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas America 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 Atlas America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas America has no effect on the direction of IShares Core i.e., IShares Core and Atlas America go up and down completely randomly.
Pair Corralation between IShares Core and Atlas America
Considering the 90-day investment horizon iShares Core SP is expected to generate 2.06 times more return on investment than Atlas America. However, IShares Core is 2.06 times more volatile than Atlas America. It trades about 0.11 of its potential returns per unit of risk. Atlas America is currently generating about 0.14 per unit of risk. If you would invest 60,020 in iShares Core SP on September 14, 2024 and sell it today you would earn a total of 715.00 from holding iShares Core SP or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
iShares Core SP vs. Atlas America
Performance |
| Timeline |
| iShares Core SP |
| Atlas America |
IShares Core and Atlas America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Atlas America
The main advantage of trading using opposite IShares Core and Atlas America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Atlas America 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 Atlas America will offset losses from the drop in Atlas America'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 |
| Atlas America vs. Vanguard Total Stock | Atlas America vs. SPDR SP 500 | Atlas America vs. iShares Core SP | Atlas America 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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