Correlation Between IShares Treasury and Multi Units

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

By analyzing existing cross correlation between iShares Treasury Bond and Multi Units France, you can compare the effects of market volatilities on IShares Treasury and Multi Units 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 Treasury with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and Multi Units.

Diversification Opportunities for IShares Treasury and Multi Units

-0.26

Correlation Coefficient

IShares Treasury  Multi Units

Very good diversification

The 3 months correlation between IShares and Multi is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Bond and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and IShares Treasury 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 Treasury Bond are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of IShares Treasury i.e., IShares Treasury and Multi Units go up and down completely randomly.

Pair Corralation between IShares Treasury and Multi Units

Assuming the 90 days trading horizon iShares Treasury Bond is expected to under-perform the Multi Units. In addition to that, IShares Treasury is 1.18 times more volatile than Multi Units France. It trades about -0.12 of its total potential returns per unit of risk. Multi Units France is currently generating about 0.11 per unit of volatility. If you would invest  17,386  in Multi Units France on September 13, 2024 and sell it today you would earn a total of  931.00  from holding Multi Units France or generate 5.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

iShares Treasury Bond  vs.  Multi Units France

iShares Treasury Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Treasury Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Multi Units France

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Units France are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Multi Units is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares Treasury and Multi Units

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

The idea behind iShares Treasury Bond and Multi Units France 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.