Correlation Between IShares Global and SportsHero
Can any of the company-specific risk be diversified away by investing in both IShares Global and SportsHero 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 SportsHero 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 SportsHero, you can compare the effects of market volatilities on IShares Global and SportsHero 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 SportsHero. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SportsHero.
Diversification Opportunities for IShares Global and SportsHero
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and SportsHero is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and SportsHero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SportsHero 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 SportsHero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SportsHero has no effect on the direction of IShares Global i.e., IShares Global and SportsHero go up and down completely randomly.
Pair Corralation between IShares Global and SportsHero
Assuming the 90 days trading horizon iShares Global Healthcare is expected to under-perform the SportsHero. But the etf apears to be less risky and, when comparing its historical volatility, iShares Global Healthcare is 8.82 times less risky than SportsHero. The etf trades about -0.1 of its potential returns per unit of risk. The SportsHero is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1.20 in SportsHero on August 25, 2024 and sell it today you would earn a total of 0.70 from holding SportsHero or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. SportsHero
Performance |
| Timeline |
| iShares Global Healthcare |
| SportsHero |
IShares Global and SportsHero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and SportsHero
The main advantage of trading using opposite IShares Global and SportsHero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, SportsHero 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 SportsHero will offset losses from the drop in SportsHero's long position.| IShares Global vs. BetaShares Global Government | IShares Global vs. BetaShares Geared Australian | IShares Global vs. Global X Semiconductor | IShares Global vs. iShares UBS Government |
| SportsHero vs. Ecofibre | SportsHero vs. iShares Global Healthcare | SportsHero vs. Adriatic Metals Plc | SportsHero vs. Australian Dairy Farms |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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