Correlation Between IShares Trust and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Trust and IShares Global 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 Global 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 Global Timber, you can compare the effects of market volatilities on IShares Trust and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and IShares Global.
Diversification Opportunities for IShares Trust and IShares Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of IShares Trust i.e., IShares Trust and IShares Global go up and down completely randomly.
Pair Corralation between IShares Trust and IShares Global
Assuming the 90 days trading horizon iShares Trust is expected to generate 22.35 times more return on investment than IShares Global. However, IShares Trust is 22.35 times more volatile than iShares Global Timber. It trades about 0.07 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.07 per unit of risk. If you would invest 279,513 in iShares Trust on August 24, 2024 and sell it today you would earn a total of 88,810 from holding iShares Trust or generate 31.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 48.99% |
| Values | Daily Returns |
iShares Trust vs. iShares Global Timber
Performance |
| Timeline |
| iShares Trust |
| iShares Global Timber |
IShares Trust and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and IShares Global
The main advantage of trading using opposite IShares Trust and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard STAR Funds | IShares Trust vs. SPDR SP 500 |
| IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |