Correlation Between IShares Trust and IShares Trust

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Can any of the company-specific risk be diversified away by investing in both IShares Trust and IShares Trust 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 Trust and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and iShares Trust , you can compare the effects of market volatilities on IShares Trust and IShares Trust 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 Trust with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and IShares Trust.

Diversification Opportunities for IShares Trust and IShares Trust

ISharesISharesDiversified AwayISharesISharesDiversified Away100%
0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between IShares and IShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and IShares Trust 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 Trust are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares Trust i.e., IShares Trust and IShares Trust go up and down completely randomly.

Pair Corralation between IShares Trust and IShares Trust

Assuming the 90 days trading horizon iShares Trust is expected to under-perform the IShares Trust. In addition to that, IShares Trust is 1.58 times more volatile than iShares Trust . It trades about -0.22 of its total potential returns per unit of risk. iShares Trust is currently generating about -0.26 per unit of volatility. If you would invest  109,963  in iShares Trust on September 25, 2024 and sell it today you would lose (5,971) from holding iShares Trust or give up 5.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy90.0%
ValuesDaily Returns

iShares Trust   vs.  iShares Trust

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 51015202530
JavaScript chart by amCharts 3.21.15IWN IGF
       Timeline  
iShares Trust 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, IShares Trust may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3,2003,3003,4003,5003,600
iShares Trust 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, IShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1,0401,0601,0801,1001,120

IShares Trust and IShares Trust Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.92-5.93-3.94-1.960.03312.054.186.38.4310.55 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15IWN IGF
       Returns  

Pair Trading with IShares Trust and IShares Trust

The main advantage of trading using opposite IShares Trust and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.
The idea behind iShares Trust and iShares Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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