Correlation Between IShares Core and IA Clarington
Can any of the company-specific risk be diversified away by investing in both IShares Core and IA Clarington 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 IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Growth and IA Clarington Core, you can compare the effects of market volatilities on IShares Core and IA Clarington 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 IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IA Clarington.
Diversification Opportunities for IShares Core and IA Clarington
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and ICPB is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Growth and IA Clarington Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Core 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 Growth are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Core has no effect on the direction of IShares Core i.e., IShares Core and IA Clarington go up and down completely randomly.
Pair Corralation between IShares Core and IA Clarington
Assuming the 90 days trading horizon iShares Core Growth is expected to generate 1.53 times more return on investment than IA Clarington. However, IShares Core is 1.53 times more volatile than IA Clarington Core. It trades about 0.5 of its potential returns per unit of risk. IA Clarington Core is currently generating about 0.33 per unit of risk. If you would invest 2,962 in iShares Core Growth on September 1, 2024 and sell it today you would earn a total of 142.00 from holding iShares Core Growth or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core Growth vs. IA Clarington Core
Performance |
| Timeline |
| iShares Core Growth |
| IA Clarington Core |
IShares Core and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IA Clarington
The main advantage of trading using opposite IShares Core and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.| IShares Core vs. iShares Core Balanced | IShares Core vs. Vanguard Growth Portfolio | IShares Core vs. iShares Core Equity | IShares Core vs. Vanguard All Equity ETF |
| IA Clarington vs. IA Clarington Floating | IA Clarington vs. IA Clarington Loomis | IA Clarington vs. Global X Active | IA Clarington vs. IA Clarington Strategic |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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