Correlation Between IShares Silver and FT Cboe
Can any of the company-specific risk be diversified away by investing in both IShares Silver and FT Cboe 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 IShares Silver and FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Silver Trust and FT Cboe Vest, you can compare the effects of market volatilities on IShares Silver and FT Cboe 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 IShares Silver with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and FT Cboe.
Diversification Opportunities for IShares Silver and FT Cboe
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IGLD is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and IShares Silver 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 iShares Silver Trust are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of IShares Silver i.e., IShares Silver and FT Cboe go up and down completely randomly.
Pair Corralation between IShares Silver and FT Cboe
Considering the 90-day investment horizon iShares Silver Trust is expected to under-perform the FT Cboe. In addition to that, IShares Silver is 1.5 times more volatile than FT Cboe Vest. It trades about -0.23 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about -0.12 per unit of volatility. If you would invest 2,200 in FT Cboe Vest on August 29, 2024 and sell it today you would lose (79.00) from holding FT Cboe Vest or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Silver Trust vs. FT Cboe Vest
Performance |
| Timeline |
| iShares Silver Trust |
| FT Cboe Vest |
IShares Silver and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Silver and FT Cboe
The main advantage of trading using opposite IShares Silver and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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