Correlation Between IShares Trust and New Oriental
Can any of the company-specific risk be diversified away by investing in both IShares Trust and New Oriental 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 New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and New Oriental Education, you can compare the effects of market volatilities on IShares Trust and New Oriental 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 New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and New Oriental.
Diversification Opportunities for IShares Trust and New Oriental
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and New is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education 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 New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of IShares Trust i.e., IShares Trust and New Oriental go up and down completely randomly.
Pair Corralation between IShares Trust and New Oriental
Assuming the 90 days trading horizon iShares Trust is expected to generate 0.52 times more return on investment than New Oriental. However, iShares Trust is 1.94 times less risky than New Oriental. It trades about 0.09 of its potential returns per unit of risk. New Oriental Education is currently generating about 0.01 per unit of risk. If you would invest 164,998 in iShares Trust on September 2, 2024 and sell it today you would earn a total of 23,502 from holding iShares Trust or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. New Oriental Education
Performance |
| Timeline |
| iShares Trust |
| New Oriental Education |
IShares Trust and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and New Oriental
The main advantage of trading using opposite IShares Trust and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| New Oriental vs. Grupo Sports World | New Oriental vs. GMxico Transportes SAB | New Oriental vs. Hoteles City Express | New Oriental vs. UnitedHealth Group Incorporated |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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