Correlation Between IShares Trust and NOW
Can any of the company-specific risk be diversified away by investing in both IShares Trust and NOW 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 Trust and NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and NOW Inc, you can compare the effects of market volatilities on IShares Trust and NOW 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 Trust with a short position of NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and NOW.
Diversification Opportunities for IShares Trust and NOW
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and NOW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc and IShares Trust 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 Trust are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of IShares Trust i.e., IShares Trust and NOW go up and down completely randomly.
Pair Corralation between IShares Trust and NOW
If you would invest 189,044 in iShares Trust on August 31, 2024 and sell it today you would lose (544.00) from holding iShares Trust or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. NOW Inc
Performance |
| Timeline |
| iShares Trust |
| NOW Inc |
IShares Trust and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and NOW
The main advantage of trading using opposite IShares Trust and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| NOW vs. First Majestic Silver | NOW vs. FibraHotel | NOW vs. Ameriprise Financial | NOW vs. Capital One Financial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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