Correlation Between IShares Corp and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both IShares Corp and Leverage Shares 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 Leverage Shares 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 Leverage Shares 3x, you can compare the effects of market volatilities on IShares Corp and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Corp and Leverage Shares.
Diversification Opportunities for IShares Corp and Leverage Shares
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Leverage is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Corp Bond and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of IShares Corp i.e., IShares Corp and Leverage Shares go up and down completely randomly.
Pair Corralation between IShares Corp and Leverage Shares
Assuming the 90 days trading horizon IShares Corp is expected to generate 73.25 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, iShares Corp Bond is 22.51 times less risky than Leverage Shares. It trades about 0.03 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 398,976 in Leverage Shares 3x on September 12, 2024 and sell it today you would earn a total of 4,399,259 from holding Leverage Shares 3x or generate 1102.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
iShares Corp Bond vs. Leverage Shares 3x
Performance |
| Timeline |
| iShares Corp Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Leverage Shares 3x |
IShares Corp and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Corp and Leverage Shares
The main advantage of trading using opposite IShares Corp and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Corp position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| IShares Corp vs. iShares MSCI Japan | IShares Corp vs. iShares JP Morgan | IShares Corp vs. iShares MSCI Europe | IShares Corp vs. iShares Nasdaq Biotechnology |
| Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. GraniteShares 3x Short | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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