Correlation Between IShares Core and Xtrackers Stoxx
Can any of the company-specific risk be diversified away by investing in both IShares Core and Xtrackers Stoxx 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 Core and Xtrackers Stoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Xtrackers Stoxx, you can compare the effects of market volatilities on IShares Core and Xtrackers Stoxx 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 Core with a short position of Xtrackers Stoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Xtrackers Stoxx.
Diversification Opportunities for IShares Core and Xtrackers Stoxx
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Xtrackers is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Xtrackers Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Stoxx and IShares Core 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 Core SP are associated (or correlated) with Xtrackers Stoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Stoxx has no effect on the direction of IShares Core i.e., IShares Core and Xtrackers Stoxx go up and down completely randomly.
Pair Corralation between IShares Core and Xtrackers Stoxx
Assuming the 90 days trading horizon iShares Core SP is expected to generate 1.05 times more return on investment than Xtrackers Stoxx. However, IShares Core is 1.05 times more volatile than Xtrackers Stoxx. It trades about 0.12 of its potential returns per unit of risk. Xtrackers Stoxx is currently generating about -0.02 per unit of risk. If you would invest 37,712 in iShares Core SP on August 28, 2024 and sell it today you would earn a total of 22,736 from holding iShares Core SP or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
iShares Core SP vs. Xtrackers Stoxx
Performance |
| Timeline |
| iShares Core SP |
| Xtrackers Stoxx |
IShares Core and Xtrackers Stoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Xtrackers Stoxx
The main advantage of trading using opposite IShares Core and Xtrackers Stoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Xtrackers Stoxx 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 Xtrackers Stoxx will offset losses from the drop in Xtrackers Stoxx's long position.| IShares Core vs. iShares Govt Bond | IShares Core vs. iShares Global AAA AA | IShares Core vs. iShares Smart City | IShares Core vs. iShares Broad High |
| Xtrackers Stoxx vs. Xtrackers II Global | Xtrackers Stoxx vs. Xtrackers FTSE | Xtrackers Stoxx vs. Xtrackers SP 500 | Xtrackers Stoxx vs. Xtrackers MSCI |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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