Correlation Between IShares Russell and THOR Financial
Can any of the company-specific risk be diversified away by investing in both IShares Russell and THOR Financial 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 THOR Financial 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 THOR Financial Technologies, you can compare the effects of market volatilities on IShares Russell and THOR Financial 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 THOR Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and THOR Financial.
Diversification Opportunities for IShares Russell and THOR Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and THOR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and THOR Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THOR Financial Techn 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 THOR Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THOR Financial Techn has no effect on the direction of IShares Russell i.e., IShares Russell and THOR Financial go up and down completely randomly.
Pair Corralation between IShares Russell and THOR Financial
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 1.21 times more return on investment than THOR Financial. However, IShares Russell is 1.21 times more volatile than THOR Financial Technologies. It trades about 0.39 of its potential returns per unit of risk. THOR Financial Technologies is currently generating about 0.37 per unit of risk. If you would invest 31,277 in iShares Russell 1000 on September 5, 2024 and sell it today you would earn a total of 2,040 from holding iShares Russell 1000 or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. THOR Financial Technologies
Performance |
| Timeline |
| iShares Russell 1000 |
| THOR Financial Techn |
IShares Russell and THOR Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and THOR Financial
The main advantage of trading using opposite IShares Russell and THOR Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, THOR Financial 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 THOR Financial will offset losses from the drop in THOR Financial's long position.| IShares Russell vs. Vanguard Total Stock | IShares Russell vs. SPDR SP 500 | IShares Russell vs. iShares Core SP | IShares Russell vs. Vanguard Dividend Appreciation |
| THOR Financial vs. Vanguard Total Stock | THOR Financial vs. SPDR SP 500 | THOR Financial vs. iShares Core SP | THOR Financial vs. Vanguard Dividend Appreciation |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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