Correlation Between IShares SP and ACGR
Can any of the company-specific risk be diversified away by investing in both IShares SP and ACGR 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 SP and ACGR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and ACGR, you can compare the effects of market volatilities on IShares SP and ACGR 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 SP with a short position of ACGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and ACGR.
Diversification Opportunities for IShares SP and ACGR
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and ACGR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and ACGR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACGR and IShares SP 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 SP 500 are associated (or correlated) with ACGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACGR has no effect on the direction of IShares SP i.e., IShares SP and ACGR go up and down completely randomly.
Pair Corralation between IShares SP and ACGR
Considering the 90-day investment horizon iShares SP 500 is expected to generate 1.05 times more return on investment than ACGR. However, IShares SP is 1.05 times more volatile than ACGR. It trades about 0.05 of its potential returns per unit of risk. ACGR is currently generating about -0.01 per unit of risk. If you would invest 10,520 in iShares SP 500 on October 25, 2024 and sell it today you would earn a total of 94.00 from holding iShares SP 500 or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. ACGR
Performance |
| Timeline |
| iShares SP 500 |
| ACGR |
IShares SP and ACGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and ACGR
The main advantage of trading using opposite IShares SP and ACGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, ACGR 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 ACGR will offset losses from the drop in ACGR's long position.| IShares SP vs. FT Vest Equity | IShares SP vs. Northern Lights | IShares SP vs. Dimensional International High | IShares SP vs. First Trust Exchange Traded |
| ACGR vs. FT Vest Equity | ACGR vs. Northern Lights | ACGR vs. Dimensional International High | ACGR vs. First Trust Exchange Traded |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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