Correlation Between Themes Transatlantic and IShares Global
Can any of the company-specific risk be diversified away by investing in both Themes Transatlantic 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 Themes Transatlantic and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themes Transatlantic Defense and iShares Global Industrials, you can compare the effects of market volatilities on Themes Transatlantic 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 Themes Transatlantic with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themes Transatlantic and IShares Global.
Diversification Opportunities for Themes Transatlantic and IShares Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Themes and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Themes Transatlantic Defense 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 Themes Transatlantic 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 Themes Transatlantic Defense 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 Themes Transatlantic i.e., Themes Transatlantic and IShares Global go up and down completely randomly.
Pair Corralation between Themes Transatlantic and IShares Global
Given the investment horizon of 90 days Themes Transatlantic Defense is expected to generate 1.08 times more return on investment than IShares Global. However, Themes Transatlantic is 1.08 times more volatile than iShares Global Industrials. It trades about 0.33 of its potential returns per unit of risk. iShares Global Industrials is currently generating about 0.26 per unit of risk. If you would invest 2,531 in Themes Transatlantic Defense on November 3, 2024 and sell it today you would earn a total of 172.00 from holding Themes Transatlantic Defense or generate 6.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Themes Transatlantic Defense vs. iShares Global Industrials
Performance |
Timeline |
Themes Transatlantic |
iShares Global Indus |
Themes Transatlantic and IShares Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Themes Transatlantic and IShares Global
The main advantage of trading using opposite Themes Transatlantic and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themes Transatlantic 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.Themes Transatlantic vs. Ultimus Managers Trust | Themes Transatlantic vs. American Beacon Select | Themes Transatlantic vs. First Trust Indxx | Themes Transatlantic vs. Direxion Daily SP |
IShares Global vs. iShares Global Consumer | IShares Global vs. iShares Global Utilities | IShares Global vs. iShares Global Consumer | IShares Global vs. iShares Global Materials |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |