Correlation Between United States and IShares Trust
Can any of the company-specific risk be diversified away by investing in both United States and IShares Trust 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 United States and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and iShares Trust , you can compare the effects of market volatilities on United States and IShares Trust 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 United States with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and IShares Trust.
Diversification Opportunities for United States and IShares Trust
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and IShares is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and United States 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 United States Steel are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of United States i.e., United States and IShares Trust go up and down completely randomly.
Pair Corralation between United States and IShares Trust
Given the investment horizon of 90 days United States Steel is expected to generate 5.85 times more return on investment than IShares Trust. However, United States is 5.85 times more volatile than iShares Trust . It trades about 0.15 of its potential returns per unit of risk. iShares Trust is currently generating about 0.16 per unit of risk. If you would invest 76,568 in United States Steel on August 28, 2024 and sell it today you would earn a total of 8,212 from holding United States Steel or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
United States Steel vs. iShares Trust
Performance |
| Timeline |
| United States Steel |
| iShares Trust |
United States and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and IShares Trust
The main advantage of trading using opposite United States and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| United States vs. The Select Sector | United States vs. Promotora y Operadora | United States vs. iShares Global Timber | United States vs. SPDR Series Trust |
| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Tax Managed Funds | IShares Trust vs. Vanguard International Equity |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |