Correlation Between IShares Corp and IShares VII
Can any of the company-specific risk be diversified away by investing in both IShares Corp and IShares VII 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 Corp and IShares VII into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Corp Bond and iShares VII Public, you can compare the effects of market volatilities on IShares Corp and IShares VII 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 Corp with a short position of IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Corp and IShares VII.
Diversification Opportunities for IShares Corp and IShares VII
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Corp Bond and iShares VII Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII Public and IShares Corp 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 Corp Bond are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII Public has no effect on the direction of IShares Corp i.e., IShares Corp and IShares VII go up and down completely randomly.
Pair Corralation between IShares Corp and IShares VII
Assuming the 90 days trading horizon iShares Corp Bond is expected to generate 0.32 times more return on investment than IShares VII. However, iShares Corp Bond is 3.16 times less risky than IShares VII. It trades about 0.52 of its potential returns per unit of risk. iShares VII Public is currently generating about 0.0 per unit of risk. If you would invest 9,415 in iShares Corp Bond on September 4, 2024 and sell it today you would earn a total of 555.00 from holding iShares Corp Bond or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Corp Bond vs. iShares VII Public
Performance |
| Timeline |
| iShares Corp Bond |
| iShares VII Public |
IShares Corp and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Corp and IShares VII
The main advantage of trading using opposite IShares Corp and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Corp position performs unexpectedly, IShares VII 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 VII will offset losses from the drop in IShares VII's long position.| IShares Corp vs. Vanguard FTSE Developed | IShares Corp vs. HSBC MSCI Japan | IShares Corp vs. iShares II Public | IShares Corp vs. Hydratec Industries NV |
| IShares VII vs. Vanguard FTSE Developed | IShares VII vs. HSBC MSCI Japan | IShares VII vs. iShares II Public | IShares VII vs. Hydratec Industries NV |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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