Correlation Between FT Cboe and IShares

Can any of the company-specific risk be diversified away by investing in both FT Cboe and IShares 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 FT Cboe and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FT Cboe Vest and IShares, you can compare the effects of market volatilities on FT Cboe and IShares 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 FT Cboe with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and IShares.

Diversification Opportunities for FT Cboe and IShares

0.07

Correlation Coefficient

FT Cboe  IShares

Significant diversification

The 3 months correlation between BGLD and IShares is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and FT Cboe 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 FT Cboe Vest are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of FT Cboe i.e., FT Cboe and IShares go up and down completely randomly.

Pair Corralation between FT Cboe and IShares

If you would invest  6,301  in IShares on September 5, 2024 and sell it today you would earn a total of  0.00  from holding IShares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

FT Cboe Vest  vs.  IShares

FT Cboe Vest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FT Cboe Vest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FT Cboe and IShares

The main advantage of trading using opposite FT Cboe and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Cboe position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.

The idea behind FT Cboe Vest and IShares 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.