Correlation Between IShares Global and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both IShares Global and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on IShares Global and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Westpac Banking.
Diversification Opportunities for IShares Global and Westpac Banking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Westpac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of IShares Global i.e., IShares Global and Westpac Banking go up and down completely randomly.
Pair Corralation between IShares Global and Westpac Banking
If you would invest 10,032 in Westpac Banking on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Westpac Banking or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. Westpac Banking
Performance |
| Timeline |
| iShares Global Healthcare |
| Westpac Banking |
IShares Global and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Westpac Banking
The main advantage of trading using opposite IShares Global and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking'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 |
| Westpac Banking vs. Macquarie Group | Westpac Banking vs. Rio Tinto | Westpac Banking vs. CSL | Westpac Banking vs. Commonwealth Bank of |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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