Correlation Between Ossiam Europe and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both Ossiam Europe and IShares Treasury 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 Ossiam Europe and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ossiam Europe ESG and iShares Treasury Bond, you can compare the effects of market volatilities on Ossiam Europe and IShares Treasury 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 Ossiam Europe with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ossiam Europe and IShares Treasury.
Diversification Opportunities for Ossiam Europe and IShares Treasury
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ossiam and IShares is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ossiam Europe ESG and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and Ossiam Europe 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 Ossiam Europe ESG are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of Ossiam Europe i.e., Ossiam Europe and IShares Treasury go up and down completely randomly.
Pair Corralation between Ossiam Europe and IShares Treasury
Assuming the 90 days trading horizon Ossiam Europe ESG is expected to generate 0.66 times more return on investment than IShares Treasury. However, Ossiam Europe ESG is 1.52 times less risky than IShares Treasury. It trades about 0.05 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about 0.0 per unit of risk. If you would invest 1,870,500 in Ossiam Europe ESG on September 4, 2024 and sell it today you would earn a total of 237,750 from holding Ossiam Europe ESG or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Ossiam Europe ESG vs. iShares Treasury Bond
Performance |
| Timeline |
| Ossiam Europe ESG |
| iShares Treasury Bond |
Ossiam Europe and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ossiam Europe and IShares Treasury
The main advantage of trading using opposite Ossiam Europe and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ossiam Europe position performs unexpectedly, IShares Treasury 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 Treasury will offset losses from the drop in IShares Treasury's long position.| Ossiam Europe vs. iShares Treasury Bond | Ossiam Europe vs. iShares Treasury Bond | Ossiam Europe vs. Amundi Treasury Bond | Ossiam Europe vs. SPDR Barclays 10 |
| IShares Treasury vs. GraniteShares 3x Short | IShares Treasury vs. WisdomTree Natural Gas | IShares Treasury vs. Leverage Shares 3x | IShares Treasury vs. WisdomTree Natural Gas |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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