Correlation Between IShares Russell and Wahed FTSE
Can any of the company-specific risk be diversified away by investing in both IShares Russell and Wahed FTSE 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 Russell and Wahed FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 1000 and Wahed FTSE USA, you can compare the effects of market volatilities on IShares Russell and Wahed FTSE 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 Russell with a short position of Wahed FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Wahed FTSE.
Diversification Opportunities for IShares Russell and Wahed FTSE
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Wahed is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and Wahed FTSE USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahed FTSE USA and IShares Russell 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 Russell 1000 are associated (or correlated) with Wahed FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahed FTSE USA has no effect on the direction of IShares Russell i.e., IShares Russell and Wahed FTSE go up and down completely randomly.
Pair Corralation between IShares Russell and Wahed FTSE
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 0.97 times more return on investment than Wahed FTSE. However, iShares Russell 1000 is 1.04 times less risky than Wahed FTSE. It trades about 0.12 of its potential returns per unit of risk. Wahed FTSE USA is currently generating about 0.11 per unit of risk. If you would invest 21,461 in iShares Russell 1000 on September 4, 2024 and sell it today you would earn a total of 11,840 from holding iShares Russell 1000 or generate 55.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. Wahed FTSE USA
Performance |
| Timeline |
| iShares Russell 1000 |
| Wahed FTSE USA |
IShares Russell and Wahed FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Wahed FTSE
The main advantage of trading using opposite IShares Russell and Wahed FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, Wahed FTSE 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 Wahed FTSE will offset losses from the drop in Wahed FTSE's long position.| IShares Russell vs. iShares Russell 3000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell 2000 |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |