Correlation Between IShares Global and Schlumberger

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Can any of the company-specific risk be diversified away by investing in both IShares Global and Schlumberger 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 Global and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Timber and Schlumberger Limited, you can compare the effects of market volatilities on IShares Global and Schlumberger 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 Global with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Schlumberger.

Diversification Opportunities for IShares Global and Schlumberger

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between IShares and Schlumberger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Timber and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited and IShares Global 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 Global Timber are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of IShares Global i.e., IShares Global and Schlumberger go up and down completely randomly.

Pair Corralation between IShares Global and Schlumberger

If you would invest  83,190  in Schlumberger Limited on August 27, 2024 and sell it today you would earn a total of  7,460  from holding Schlumberger Limited or generate 8.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

iShares Global Timber  vs.  Schlumberger Limited

 Performance 
       Timeline  
iShares Global Timber 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days iShares Global Timber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, IShares Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Schlumberger Limited 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Schlumberger Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Schlumberger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IShares Global and Schlumberger Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Global and Schlumberger

The main advantage of trading using opposite IShares Global and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.
The idea behind iShares Global Timber and Schlumberger Limited 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.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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