Correlation Between IShares Russell and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both IShares Russell and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell Mid Cap and SPDR Kensho New, you can compare the effects of market volatilities on IShares Russell and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and SPDR Kensho.
Diversification Opportunities for IShares Russell and SPDR Kensho
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and SPDR Kensho New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho New 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 Mid Cap are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho New has no effect on the direction of IShares Russell i.e., IShares Russell and SPDR Kensho go up and down completely randomly.
Pair Corralation between IShares Russell and SPDR Kensho
Considering the 90-day investment horizon iShares Russell Mid Cap is expected to generate 0.79 times more return on investment than SPDR Kensho. However, iShares Russell Mid Cap is 1.27 times less risky than SPDR Kensho. It trades about 0.08 of its potential returns per unit of risk. SPDR Kensho New is currently generating about 0.04 per unit of risk. If you would invest 9,170 in iShares Russell Mid Cap on November 2, 2024 and sell it today you would earn a total of 4,297 from holding iShares Russell Mid Cap or generate 46.86% 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 Mid Cap vs. SPDR Kensho New
Performance |
| Timeline |
| iShares Russell Mid |
| SPDR Kensho New |
IShares Russell and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and SPDR Kensho
The main advantage of trading using opposite IShares Russell and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| IShares Russell vs. JPMorgan Fundamental Data | IShares Russell vs. Davis Select International | IShares Russell vs. Dimensional ETF Trust | IShares Russell vs. Principal Value ETF |
| SPDR Kensho vs. SPDR Kensho Clean | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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