Correlation Between IShares Dow and IShares
Can any of the company-specific risk be diversified away by investing in both IShares Dow and IShares 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 Dow and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Dow Jones and IShares, you can compare the effects of market volatilities on IShares Dow and IShares 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 Dow with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dow and IShares.
Diversification Opportunities for IShares Dow and IShares
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dow Jones and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and IShares Dow 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 Dow Jones are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of IShares Dow i.e., IShares Dow and IShares go up and down completely randomly.
Pair Corralation between IShares Dow and IShares
Considering the 90-day investment horizon iShares Dow Jones is expected to generate 0.7 times more return on investment than IShares. However, iShares Dow Jones is 1.43 times less risky than IShares. It trades about 0.13 of its potential returns per unit of risk. IShares is currently generating about -0.02 per unit of risk. If you would invest 10,389 in iShares Dow Jones on September 2, 2024 and sell it today you would earn a total of 4,380 from holding iShares Dow Jones or generate 42.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.06% |
| Values | Daily Returns |
iShares Dow Jones vs. IShares
Performance |
| Timeline |
| iShares Dow Jones |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Dow and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Dow and IShares
The main advantage of trading using opposite IShares Dow and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Dow position performs unexpectedly, IShares 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 IShares will offset losses from the drop in IShares' long position.| IShares Dow vs. iShares Russell 3000 | IShares Dow vs. iShares Industrials ETF | IShares Dow vs. iShares Consumer Discretionary | IShares Dow vs. iShares Consumer Staples |
| IShares vs. iShares Expanded Tech | IShares vs. iShares Consumer Discretionary | IShares vs. iShares Telecommunications ETF | IShares vs. iShares Industrials ETF |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |