Correlation Between Legal General and IShares Public
Can any of the company-specific risk be diversified away by investing in both Legal General and IShares Public 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 Legal General and IShares Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General UCITS and iShares Public Limited, you can compare the effects of market volatilities on Legal General and IShares Public 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 Legal General with a short position of IShares Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and IShares Public.
Diversification Opportunities for Legal General and IShares Public
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legal and IShares is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Legal General UCITS and iShares Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Public and Legal General 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 Legal General UCITS are associated (or correlated) with IShares Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Public has no effect on the direction of Legal General i.e., Legal General and IShares Public go up and down completely randomly.
Pair Corralation between Legal General and IShares Public
Assuming the 90 days trading horizon Legal General UCITS is expected to generate 0.82 times more return on investment than IShares Public. However, Legal General UCITS is 1.22 times less risky than IShares Public. It trades about 0.13 of its potential returns per unit of risk. iShares Public Limited is currently generating about -0.05 per unit of risk. If you would invest 1,961 in Legal General UCITS on November 2, 2024 and sell it today you would earn a total of 327.00 from holding Legal General UCITS or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.06% |
| Values | Daily Returns |
Legal General UCITS vs. iShares Public Limited
Performance |
| Timeline |
| Legal General UCITS |
| iShares Public |
Legal General and IShares Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and IShares Public
The main advantage of trading using opposite Legal General and IShares Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, IShares Public 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 Public will offset losses from the drop in IShares Public's long position.| Legal General vs. Legal General UCITS | Legal General vs. LG Russell 2000 | Legal General vs. VanEck Multi Asset Growth | Legal General vs. iShares III Public |
| IShares Public vs. Vanguard SP 500 | IShares Public vs. SPDR Dow Jones | IShares Public vs. iShares Core MSCI | IShares Public vs. iShares 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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