Correlation Between IShares Russell and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both IShares Russell and Xtrackers Russell 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 Xtrackers Russell 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 Xtrackers Russell Multifactor, you can compare the effects of market volatilities on IShares Russell and Xtrackers Russell 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 Xtrackers Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Xtrackers Russell.
Diversification Opportunities for IShares Russell and Xtrackers Russell
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Xtrackers is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and Xtrackers Russell Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 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 Xtrackers Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell has no effect on the direction of IShares Russell i.e., IShares Russell and Xtrackers Russell go up and down completely randomly.
Pair Corralation between IShares Russell and Xtrackers Russell
Considering the 90-day investment horizon iShares Russell Mid Cap is expected to generate 1.01 times more return on investment than Xtrackers Russell. However, IShares Russell is 1.01 times more volatile than Xtrackers Russell Multifactor. It trades about 0.47 of its potential returns per unit of risk. Xtrackers Russell Multifactor is currently generating about 0.38 per unit of risk. If you would invest 8,770 in iShares Russell Mid Cap on September 1, 2024 and sell it today you would earn a total of 777.00 from holding iShares Russell Mid Cap or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Russell Mid Cap vs. Xtrackers Russell Multifactor
Performance |
| Timeline |
| iShares Russell Mid |
| Xtrackers Russell |
IShares Russell and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Xtrackers Russell
The main advantage of trading using opposite IShares Russell and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, Xtrackers Russell 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 Xtrackers Russell will offset losses from the drop in Xtrackers Russell's long position.| IShares Russell vs. iShares Small Cap | IShares Russell vs. Invesco ESG NASDAQ | IShares Russell vs. Invesco ESG NASDAQ | IShares Russell vs. BlackRock Carbon Transition |
| Xtrackers Russell vs. Xtrackers FTSE Developed | Xtrackers Russell vs. John Hancock Multifactor | Xtrackers Russell vs. Xtrackers MSCI All | Xtrackers Russell vs. Xtrackers MSCI Eurozone |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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