Correlation Between Quaker Investment and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both Quaker Investment and IShares Treasury 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 Quaker Investment and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Investment Trust and iShares Treasury Bond, you can compare the effects of market volatilities on Quaker Investment and IShares Treasury 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 Quaker Investment with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Investment and IShares Treasury.
Diversification Opportunities for Quaker Investment and IShares Treasury
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Quaker and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Investment Trust and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and Quaker Investment 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 Quaker Investment Trust are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of Quaker Investment i.e., Quaker Investment and IShares Treasury go up and down completely randomly.
Pair Corralation between Quaker Investment and IShares Treasury
Given the investment horizon of 90 days Quaker Investment Trust is expected to generate 1.21 times more return on investment than IShares Treasury. However, Quaker Investment is 1.21 times more volatile than iShares Treasury Bond. It trades about 0.05 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about 0.04 per unit of risk. If you would invest 1,646 in Quaker Investment Trust on August 27, 2024 and sell it today you would earn a total of 62.00 from holding Quaker Investment Trust or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Investment Trust vs. iShares Treasury Bond
Performance |
| Timeline |
| Quaker Investment Trust |
| iShares Treasury Bond |
Quaker Investment and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Investment and IShares Treasury
The main advantage of trading using opposite Quaker Investment and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Investment position performs unexpectedly, IShares Treasury 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 Treasury will offset losses from the drop in IShares Treasury's long position.The idea behind Quaker Investment Trust and iShares Treasury Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| IShares Treasury vs. iShares MBS ETF | IShares Treasury vs. iShares Core Total | IShares Treasury vs. iShares 3 7 Year | IShares Treasury vs. iShares 10 20 Year |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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