Correlation Between MULTI UNITS and IShares Core
Can any of the company-specific risk be diversified away by investing in both MULTI UNITS and IShares Core 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 MULTI UNITS and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MULTI UNITS LUXEMBOURG and iShares Core SP, you can compare the effects of market volatilities on MULTI UNITS and IShares Core 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 MULTI UNITS with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of MULTI UNITS and IShares Core.
Diversification Opportunities for MULTI UNITS and IShares Core
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MULTI and IShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MULTI UNITS LUXEMBOURG and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and MULTI UNITS 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 MULTI UNITS LUXEMBOURG are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of MULTI UNITS i.e., MULTI UNITS and IShares Core go up and down completely randomly.
Pair Corralation between MULTI UNITS and IShares Core
Assuming the 90 days trading horizon MULTI UNITS LUXEMBOURG is expected to generate 2.02 times more return on investment than IShares Core. However, MULTI UNITS is 2.02 times more volatile than iShares Core SP. It trades about 0.07 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.11 per unit of risk. If you would invest 11,030 in MULTI UNITS LUXEMBOURG on September 3, 2024 and sell it today you would earn a total of 6,344 from holding MULTI UNITS LUXEMBOURG or generate 57.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MULTI UNITS LUXEMBOURG vs. iShares Core SP
Performance |
| Timeline |
| MULTI UNITS LUXEMBOURG |
| iShares Core SP |
MULTI UNITS and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MULTI UNITS and IShares Core
The main advantage of trading using opposite MULTI UNITS and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MULTI UNITS position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| MULTI UNITS vs. UBSFund Solutions MSCI | MULTI UNITS vs. Vanguard SP 500 | MULTI UNITS vs. iShares VII PLC | MULTI UNITS vs. iShares Core SP |
| IShares Core vs. iShares Corp Bond | IShares Core vs. iShares Emerging Asia | IShares Core vs. iShares MSCI Global | IShares Core vs. iShares VII PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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