Correlation Between IShares VII and Expat Poland
Can any of the company-specific risk be diversified away by investing in both IShares VII and Expat Poland 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 VII and Expat Poland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares VII PLC and Expat Poland WIG20, you can compare the effects of market volatilities on IShares VII and Expat Poland 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 VII with a short position of Expat Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Expat Poland.
Diversification Opportunities for IShares VII and Expat Poland
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Expat is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and Expat Poland WIG20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Poland WIG20 and IShares VII 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 VII PLC are associated (or correlated) with Expat Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Poland WIG20 has no effect on the direction of IShares VII i.e., IShares VII and Expat Poland go up and down completely randomly.
Pair Corralation between IShares VII and Expat Poland
Assuming the 90 days trading horizon iShares VII PLC is expected to generate 0.27 times more return on investment than Expat Poland. However, iShares VII PLC is 3.77 times less risky than Expat Poland. It trades about 0.1 of its potential returns per unit of risk. Expat Poland WIG20 is currently generating about 0.02 per unit of risk. If you would invest 24,235 in iShares VII PLC on September 12, 2024 and sell it today you would earn a total of 465.00 from holding iShares VII PLC or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares VII PLC vs. Expat Poland WIG20
Performance |
| Timeline |
| iShares VII PLC |
| Expat Poland WIG20 |
IShares VII and Expat Poland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares VII and Expat Poland
The main advantage of trading using opposite IShares VII and Expat Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, Expat Poland 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 Expat Poland will offset losses from the drop in Expat Poland's long position.| IShares VII vs. iShares Govt Bond | IShares VII vs. iShares Global AAA AA | IShares VII vs. iShares Smart City | IShares VII vs. iShares Broad High |
| Expat Poland vs. Expat Czech PX | Expat Poland vs. Expat Croatia Crobex | Expat Poland vs. Expat Serbia Belex15 | Expat Poland vs. Expat Slovenia SBI |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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