Correlation Between IShares Financial and Themes Global
Can any of the company-specific risk be diversified away by investing in both IShares Financial and Themes Global 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 Financial and Themes Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Financial Services and Themes Global Systemically, you can compare the effects of market volatilities on IShares Financial and Themes Global 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 Financial with a short position of Themes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Financial and Themes Global.
Diversification Opportunities for IShares Financial and Themes Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Themes is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Financial Services and Themes Global Systemically in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Global System and IShares Financial 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 Financial Services are associated (or correlated) with Themes Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Global System has no effect on the direction of IShares Financial i.e., IShares Financial and Themes Global go up and down completely randomly.
Pair Corralation between IShares Financial and Themes Global
Considering the 90-day investment horizon IShares Financial is expected to generate 1.38 times less return on investment than Themes Global. In addition to that, IShares Financial is 1.11 times more volatile than Themes Global Systemically. It trades about 0.09 of its total potential returns per unit of risk. Themes Global Systemically is currently generating about 0.14 per unit of volatility. If you would invest 2,478 in Themes Global Systemically on September 3, 2024 and sell it today you would earn a total of 891.00 from holding Themes Global Systemically or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 48.89% |
| Values | Daily Returns |
iShares Financial Services vs. Themes Global Systemically
Performance |
| Timeline |
| iShares Financial |
| Themes Global System |
IShares Financial and Themes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Financial and Themes Global
The main advantage of trading using opposite IShares Financial and Themes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Financial position performs unexpectedly, Themes Global 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 Themes Global will offset losses from the drop in Themes Global's long position.| IShares Financial vs. Vanguard Industrials Index | IShares Financial vs. Vanguard Consumer Discretionary | IShares Financial vs. Vanguard Materials Index | IShares Financial vs. Vanguard Health Care |
| Themes Global vs. Ultimus Managers Trust | Themes Global vs. American Beacon Select | Themes Global vs. Direxion Daily Regional | Themes Global vs. Direxion Daily SP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |