Correlation Between IShares Russell and FundX ETF
Can any of the company-specific risk be diversified away by investing in both IShares Russell and FundX ETF 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 FundX ETF 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 FundX ETF, you can compare the effects of market volatilities on IShares Russell and FundX ETF 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 FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and FundX ETF.
Diversification Opportunities for IShares Russell and FundX ETF
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and FundX is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX ETF 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 FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of IShares Russell i.e., IShares Russell and FundX ETF go up and down completely randomly.
Pair Corralation between IShares Russell and FundX ETF
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 1.1 times more return on investment than FundX ETF. However, IShares Russell is 1.1 times more volatile than FundX ETF. It trades about 0.24 of its potential returns per unit of risk. FundX ETF is currently generating about 0.21 per unit of risk. If you would invest 39,848 in iShares Russell 1000 on September 12, 2024 and sell it today you would earn a total of 1,736 from holding iShares Russell 1000 or generate 4.36% 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. FundX ETF
Performance |
| Timeline |
| iShares Russell 1000 |
| FundX ETF |
IShares Russell and FundX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and FundX ETF
The main advantage of trading using opposite IShares Russell and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF's long position.| IShares Russell vs. iShares Factors Growth | IShares Russell vs. Absolute Core Strategy | IShares Russell vs. iShares ESG Advanced | IShares Russell vs. PIMCO RAFI Dynamic |
| FundX ETF vs. Freedom Day Dividend | FundX ETF vs. Franklin Templeton ETF | FundX ETF vs. iShares MSCI China | FundX ETF vs. Tidal Trust II |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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