Correlation Between Schlumberger and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Schlumberger and IShares Trust 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 Schlumberger and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger Limited and iShares Trust , you can compare the effects of market volatilities on Schlumberger and IShares Trust 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 Schlumberger with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and IShares Trust.
Diversification Opportunities for Schlumberger and IShares Trust
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schlumberger and IShares is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger Limited and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Schlumberger 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 Schlumberger Limited are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Schlumberger i.e., Schlumberger and IShares Trust go up and down completely randomly.
Pair Corralation between Schlumberger and IShares Trust
Assuming the 90 days trading horizon Schlumberger Limited is expected to generate 1.18 times more return on investment than IShares Trust. However, Schlumberger is 1.18 times more volatile than iShares Trust . It trades about 0.19 of its potential returns per unit of risk. iShares Trust is currently generating about 0.01 per unit of risk. If you would invest 81,300 in Schlumberger Limited on August 31, 2024 and sell it today you would earn a total of 9,053 from holding Schlumberger Limited or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger Limited vs. iShares Trust
Performance |
| Timeline |
| Schlumberger Limited |
| iShares Trust |
Schlumberger and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and IShares Trust
The main advantage of trading using opposite Schlumberger and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| Schlumberger vs. Hoteles City Express | Schlumberger vs. Taiwan Semiconductor Manufacturing | Schlumberger vs. Cognizant Technology Solutions | Schlumberger vs. United Airlines Holdings |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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