Correlation Between IShares Global and Peel Mining
Can any of the company-specific risk be diversified away by investing in both IShares Global and Peel Mining 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 Peel Mining 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 Peel Mining, you can compare the effects of market volatilities on IShares Global and Peel Mining 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Peel Mining.
Diversification Opportunities for IShares Global and Peel Mining
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Peel is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of IShares Global i.e., IShares Global and Peel Mining go up and down completely randomly.
Pair Corralation between IShares Global and Peel Mining
Assuming the 90 days trading horizon IShares Global is expected to generate 1.05 times less return on investment than Peel Mining. But when comparing it to its historical volatility, iShares Global Healthcare is 7.4 times less risky than Peel Mining. It trades about 0.05 of its potential returns per unit of risk. Peel Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Peel Mining on September 3, 2024 and sell it today you would lose (2.00) from holding Peel Mining or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. Peel Mining
Performance |
| Timeline |
| iShares Global Healthcare |
| Peel Mining |
IShares Global and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Peel Mining
The main advantage of trading using opposite IShares Global and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining'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 |
| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. Aneka Tambang Tbk |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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