Correlation Between IShares Russell and IShares Focused
Can any of the company-specific risk be diversified away by investing in both IShares Russell and IShares Focused 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 IShares Focused 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 iShares Focused Value, you can compare the effects of market volatilities on IShares Russell and IShares Focused 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 IShares Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and IShares Focused.
Diversification Opportunities for IShares Russell and IShares Focused
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and iShares Focused Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Focused Value 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 IShares Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Focused Value has no effect on the direction of IShares Russell i.e., IShares Russell and IShares Focused go up and down completely randomly.
Pair Corralation between IShares Russell and IShares Focused
Considering the 90-day investment horizon IShares Russell is expected to generate 1.53 times less return on investment than IShares Focused. But when comparing it to its historical volatility, iShares Russell Mid Cap is 1.25 times less risky than IShares Focused. It trades about 0.06 of its potential returns per unit of risk. iShares Focused Value is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,990 in iShares Focused Value on September 3, 2024 and sell it today you would earn a total of 2,616 from holding iShares Focused Value or generate 52.42% 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. iShares Focused Value
Performance |
| Timeline |
| iShares Russell Mid |
| iShares Focused Value |
IShares Russell and IShares Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and IShares Focused
The main advantage of trading using opposite IShares Russell and IShares Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, IShares Focused 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 Focused will offset losses from the drop in IShares Focused's long position.| IShares Russell vs. Vanguard Mid Cap Value | IShares Russell vs. SPDR SP Dividend | IShares Russell vs. SCOR PK | IShares Russell vs. HUMANA INC |
| IShares Focused vs. Roundhill Acquirers Deep | IShares Focused vs. BlackRock Equity Factor | IShares Focused vs. iShares MSCI USA | IShares Focused vs. iShares Evolved Discretionary |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |