Correlation Between VF and IShares 10
Can any of the company-specific risk be diversified away by investing in both VF and IShares 10 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 VF and IShares 10 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VF Corporation and iShares 10 Year, you can compare the effects of market volatilities on VF and IShares 10 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 VF with a short position of IShares 10. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and IShares 10.
Diversification Opportunities for VF and IShares 10
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between VF and IShares is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and iShares 10 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 10 Year and VF 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 VF Corporation are associated (or correlated) with IShares 10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 10 Year has no effect on the direction of VF i.e., VF and IShares 10 go up and down completely randomly.
Pair Corralation between VF and IShares 10
Considering the 90-day investment horizon VF Corporation is expected to generate 4.87 times more return on investment than IShares 10. However, VF is 4.87 times more volatile than iShares 10 Year. It trades about 0.01 of its potential returns per unit of risk. iShares 10 Year is currently generating about 0.02 per unit of risk. If you would invest 1,920 in VF Corporation on December 12, 2024 and sell it today you would lose (187.00) from holding VF Corporation or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VF Corp. vs. iShares 10 Year
Performance |
| Timeline |
| VF Corporation |
| iShares 10 Year |
VF and IShares 10 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VF and IShares 10
The main advantage of trading using opposite VF and IShares 10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF position performs unexpectedly, IShares 10 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 10 will offset losses from the drop in IShares 10's long position.The idea behind VF Corporation and iShares 10 Year pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares 10 vs. SPDR Barclays Long | ||
| IShares 10 vs. iShares 5 10 Year | ||
| IShares 10 vs. iShares 1 5 Year | ||
| IShares 10 vs. iShares Core 10 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |