Correlation Between US Global and IShares Global
Can any of the company-specific risk be diversified away by investing in both US Global and IShares 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 US Global and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Jets and iShares Global Industrials, you can compare the effects of market volatilities on US Global and IShares 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 US Global with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and IShares Global.
Diversification Opportunities for US Global and IShares Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JETS and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding US Global Jets and iShares Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Indus and US Global 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 US Global Jets are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Indus has no effect on the direction of US Global i.e., US Global and IShares Global go up and down completely randomly.
Pair Corralation between US Global and IShares Global
Given the investment horizon of 90 days US Global Jets is expected to generate 2.08 times more return on investment than IShares Global. However, US Global is 2.08 times more volatile than iShares Global Industrials. It trades about 0.2 of its potential returns per unit of risk. iShares Global Industrials is currently generating about 0.15 per unit of risk. If you would invest 2,303 in US Global Jets on August 27, 2024 and sell it today you would earn a total of 163.00 from holding US Global Jets or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Jets vs. iShares Global Industrials
Performance |
| Timeline |
| US Global Jets |
| iShares Global Indus |
US Global and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and IShares Global
The main advantage of trading using opposite US Global and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, IShares 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 IShares Global will offset losses from the drop in IShares Global's long position.| US Global vs. Gabelli ETFs Trust | US Global vs. First Trust Exchange Traded | US Global vs. Northern Lights | US Global vs. First Trust Exchange Traded |
| IShares Global vs. Gabelli ETFs Trust | IShares Global vs. First Trust Exchange Traded | IShares Global vs. Northern Lights | IShares Global vs. First Trust Exchange Traded |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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