Correlation Between IShares Trust and GMxico Transportes
Can any of the company-specific risk be diversified away by investing in both IShares Trust and GMxico Transportes 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 GMxico Transportes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and GMxico Transportes SAB, you can compare the effects of market volatilities on IShares Trust and GMxico Transportes 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 GMxico Transportes. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and GMxico Transportes.
Diversification Opportunities for IShares Trust and GMxico Transportes
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and GMxico is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB 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 GMxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of IShares Trust i.e., IShares Trust and GMxico Transportes go up and down completely randomly.
Pair Corralation between IShares Trust and GMxico Transportes
Assuming the 90 days trading horizon iShares Trust is expected to generate 0.88 times more return on investment than GMxico Transportes. However, iShares Trust is 1.14 times less risky than GMxico Transportes. It trades about 0.12 of its potential returns per unit of risk. GMxico Transportes SAB is currently generating about -0.02 per unit of risk. If you would invest 150,958 in iShares Trust on August 29, 2024 and sell it today you would earn a total of 179,042 from holding iShares Trust or generate 118.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Trust vs. GMxico Transportes SAB
Performance |
| Timeline |
| iShares Trust |
| GMxico Transportes SAB |
IShares Trust and GMxico Transportes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and GMxico Transportes
The main advantage of trading using opposite IShares Trust and GMxico Transportes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, GMxico Transportes 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 GMxico Transportes will offset losses from the drop in GMxico Transportes' long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| GMxico Transportes vs. Grupo Mxico SAB | GMxico Transportes vs. The Select Sector | GMxico Transportes vs. SPDR Series Trust | GMxico Transportes vs. FibroGen |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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