Correlation Between IShares Russell and IShares Consumer
Can any of the company-specific risk be diversified away by investing in both IShares Russell and IShares Consumer 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 Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 3000 and iShares Consumer Staples, you can compare the effects of market volatilities on IShares Russell and IShares Consumer 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 Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and IShares Consumer.
Diversification Opportunities for IShares Russell and IShares Consumer
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 3000 and iShares Consumer Staples in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Consumer Staples 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 3000 are associated (or correlated) with IShares Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Consumer Staples has no effect on the direction of IShares Russell i.e., IShares Russell and IShares Consumer go up and down completely randomly.
Pair Corralation between IShares Russell and IShares Consumer
Considering the 90-day investment horizon iShares Russell 3000 is expected to generate 0.82 times more return on investment than IShares Consumer. However, iShares Russell 3000 is 1.21 times less risky than IShares Consumer. It trades about 0.21 of its potential returns per unit of risk. iShares Consumer Staples is currently generating about 0.12 per unit of risk. If you would invest 33,373 in iShares Russell 3000 on November 3, 2024 and sell it today you would earn a total of 1,281 from holding iShares Russell 3000 or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 3000 vs. iShares Consumer Staples
Performance |
| Timeline |
| iShares Russell 3000 |
| iShares Consumer Staples |
IShares Russell and IShares Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and IShares Consumer
The main advantage of trading using opposite IShares Russell and IShares Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, IShares Consumer 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 Consumer will offset losses from the drop in IShares Consumer's long position.| IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Dow Jones | IShares Russell vs. iShares SP Mid Cap | IShares Russell vs. iShares SP Mid Cap |
| IShares Consumer vs. iShares Consumer Discretionary | IShares Consumer vs. iShares Industrials ETF | IShares Consumer vs. iShares Utilities ETF | IShares Consumer vs. iShares Basic Materials |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |