Correlation Between Listed Funds and IShares 1
Can any of the company-specific risk be diversified away by investing in both Listed Funds and IShares 1 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 Listed Funds and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Listed Funds Trust and iShares 1 5 Year, you can compare the effects of market volatilities on Listed Funds and IShares 1 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 Listed Funds with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Listed Funds and IShares 1.
Diversification Opportunities for Listed Funds and IShares 1
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Listed and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Listed Funds Trust and iShares 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 5 and Listed Funds 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 Listed Funds Trust are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 5 has no effect on the direction of Listed Funds i.e., Listed Funds and IShares 1 go up and down completely randomly.
Pair Corralation between Listed Funds and IShares 1
Considering the 90-day investment horizon Listed Funds Trust is expected to generate 1.35 times more return on investment than IShares 1. However, Listed Funds is 1.35 times more volatile than iShares 1 5 Year. It trades about 0.35 of its potential returns per unit of risk. iShares 1 5 Year is currently generating about 0.07 per unit of risk. If you would invest 2,211 in Listed Funds Trust on September 4, 2024 and sell it today you would earn a total of 38.00 from holding Listed Funds Trust or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Listed Funds Trust vs. iShares 1 5 Year
Performance |
| Timeline |
| Listed Funds Trust |
| iShares 1 5 |
Listed Funds and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Listed Funds and IShares 1
The main advantage of trading using opposite Listed Funds and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Listed Funds position performs unexpectedly, IShares 1 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 1 will offset losses from the drop in IShares 1's long position.| Listed Funds vs. Overlay Shares Hedged | Listed Funds vs. Overlay Shares Core | Listed Funds vs. Overlay Shares Municipal | Listed Funds vs. Overlay Shares Large |
| IShares 1 vs. iShares 5 10 Year | IShares 1 vs. iShares 0 5 Year | IShares 1 vs. SPDR Barclays Short | IShares 1 vs. iShares Core Total |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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