Correlation Between IShares Global and EROAD
Can any of the company-specific risk be diversified away by investing in both IShares Global and EROAD 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 Global and EROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Healthcare and EROAD, you can compare the effects of market volatilities on IShares Global and EROAD 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 Global with a short position of EROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and EROAD.
Diversification Opportunities for IShares Global and EROAD
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and EROAD is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and EROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EROAD and IShares Global 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 Global Healthcare are associated (or correlated) with EROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EROAD has no effect on the direction of IShares Global i.e., IShares Global and EROAD go up and down completely randomly.
Pair Corralation between IShares Global and EROAD
Assuming the 90 days trading horizon iShares Global Healthcare is expected to generate 0.35 times more return on investment than EROAD. However, iShares Global Healthcare is 2.87 times less risky than EROAD. It trades about 0.07 of its potential returns per unit of risk. EROAD is currently generating about -0.06 per unit of risk. If you would invest 14,527 in iShares Global Healthcare on December 1, 2024 and sell it today you would earn a total of 157.00 from holding iShares Global Healthcare or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Global Healthcare vs. EROAD
Performance |
| Timeline |
| iShares Global Healthcare |
| EROAD |
IShares Global and EROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and EROAD
The main advantage of trading using opposite IShares Global and EROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, EROAD 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 EROAD will offset losses from the drop in EROAD's long position.| IShares Global vs. iShares MSCI Emerging | IShares Global vs. iShares Global Aggregate | IShares Global vs. iShares CoreSP MidCap | IShares Global vs. iShares SP 500 |
| EROAD vs. Readytech Holdings | EROAD vs. Thorney Technologies | EROAD vs. Cleanaway Waste Management | EROAD vs. Advanced Braking Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |