Correlation Between IShares Energy and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both IShares Energy and Guinness Atkinson 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 Energy and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Energy ETF and Guinness Atkinson Funds, you can compare the effects of market volatilities on IShares Energy and Guinness Atkinson 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 Energy with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Energy and Guinness Atkinson.
Diversification Opportunities for IShares Energy and Guinness Atkinson
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Guinness is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding iShares Energy ETF and Guinness Atkinson Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Funds and IShares Energy 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 Energy ETF are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Funds has no effect on the direction of IShares Energy i.e., IShares Energy and Guinness Atkinson go up and down completely randomly.
Pair Corralation between IShares Energy and Guinness Atkinson
Considering the 90-day investment horizon iShares Energy ETF is expected to generate 0.89 times more return on investment than Guinness Atkinson. However, iShares Energy ETF is 1.13 times less risky than Guinness Atkinson. It trades about 0.05 of its potential returns per unit of risk. Guinness Atkinson Funds is currently generating about -0.04 per unit of risk. If you would invest 4,721 in iShares Energy ETF on September 1, 2024 and sell it today you would earn a total of 325.00 from holding iShares Energy ETF or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares Energy ETF vs. Guinness Atkinson Funds
Performance |
| Timeline |
| iShares Energy ETF |
| Guinness Atkinson Funds |
IShares Energy and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Energy and Guinness Atkinson
The main advantage of trading using opposite IShares Energy and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Energy position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| IShares Energy vs. Invesco Dynamic Oil | IShares Energy vs. SPDR SP Oil | IShares Energy vs. SPDR SP Metals |
| Guinness Atkinson vs. Invesco Dynamic Oil | Guinness Atkinson vs. SPDR SP Oil | Guinness Atkinson vs. SPDR SP Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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