Correlation Between Regents Park and IShares Core
Can any of the company-specific risk be diversified away by investing in both Regents Park 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 Regents Park and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regents Park Hedged and iShares Core Conservative, you can compare the effects of market volatilities on Regents Park 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 Regents Park with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regents Park and IShares Core.
Diversification Opportunities for Regents Park and IShares Core
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Regents and IShares is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Regents Park Hedged and iShares Core Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Conservative and Regents Park 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 Regents Park Hedged 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 Conservative has no effect on the direction of Regents Park i.e., Regents Park and IShares Core go up and down completely randomly.
Pair Corralation between Regents Park and IShares Core
Given the investment horizon of 90 days Regents Park Hedged is expected to generate 1.88 times more return on investment than IShares Core. However, Regents Park is 1.88 times more volatile than iShares Core Conservative. It trades about 0.12 of its potential returns per unit of risk. iShares Core Conservative is currently generating about 0.19 per unit of risk. If you would invest 1,028 in Regents Park Hedged on September 15, 2024 and sell it today you would earn a total of 13.00 from holding Regents Park Hedged or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regents Park Hedged vs. iShares Core Conservative
Performance |
| Timeline |
| Regents Park Hedged |
| iShares Core Conservative |
Regents Park and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regents Park and IShares Core
The main advantage of trading using opposite Regents Park and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regents Park 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.| Regents Park vs. iShares Core Conservative | Regents Park vs. iShares Core Growth | Regents Park vs. iShares Core Aggressive | Regents Park vs. Vanguard Mega Cap |
| IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Aggressive | IShares Core vs. iShares Core Growth | IShares Core vs. iShares Agency Bond |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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