Correlation Between IShares Physical and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both IShares Physical and Ecofin Global 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 Physical and Ecofin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Platinum and Ecofin Global Utilities, you can compare the effects of market volatilities on IShares Physical and Ecofin Global 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 Physical with a short position of Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Ecofin Global.
Diversification Opportunities for IShares Physical and Ecofin Global
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Ecofin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Platinum and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities and IShares Physical 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 Physical Platinum are associated (or correlated) with Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of IShares Physical i.e., IShares Physical and Ecofin Global go up and down completely randomly.
Pair Corralation between IShares Physical and Ecofin Global
Assuming the 90 days trading horizon iShares Physical Platinum is expected to generate about the same return on investment as Ecofin Global Utilities. However, IShares Physical is 1.23 times more volatile than Ecofin Global Utilities. It trades about -0.01 of its potential returns per unit of risk. Ecofin Global Utilities is currently producing about -0.01 per unit of risk. If you would invest 21,046 in Ecofin Global Utilities on September 14, 2024 and sell it today you would lose (2,346) from holding Ecofin Global Utilities or give up 11.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Physical Platinum vs. Ecofin Global Utilities
Performance |
| Timeline |
| iShares Physical Platinum |
| Ecofin Global Utilities |
IShares Physical and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Ecofin Global
The main advantage of trading using opposite IShares Physical and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.| IShares Physical vs. Ecofin Global Utilities | IShares Physical vs. Medical Properties Trust | IShares Physical vs. Taylor Maritime Investments | IShares Physical vs. Intuitive Investments Group |
| Ecofin Global vs. Eastinco Mining Exploration | Ecofin Global vs. Dolly Varden Silver | Ecofin Global vs. LPKF Laser Electronics | Ecofin Global vs. Park Hotels Resorts |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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