Correlation Between IShares Global and AdvisorShares Vice

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

By analyzing existing cross correlation between iShares Global Clean and AdvisorShares Vice ETF, you can compare the effects of market volatilities on IShares Global and AdvisorShares Vice 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 AdvisorShares Vice. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and AdvisorShares Vice.

Diversification Opportunities for IShares Global and AdvisorShares Vice

-0.79

Correlation Coefficient

IShares Global  AdvisorShares Vice

Pay attention - limited upside

The 3 months correlation between IShares and AdvisorShares is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Clean and AdvisorShares Vice ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Vice ETF 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 Clean are associated (or correlated) with AdvisorShares Vice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Vice ETF has no effect on the direction of IShares Global i.e., IShares Global and AdvisorShares Vice go up and down completely randomly.

Pair Corralation between IShares Global and AdvisorShares Vice

Given the investment horizon of 90 days iShares Global Clean is expected to under-perform the AdvisorShares Vice. In addition to that, IShares Global is 2.2 times more volatile than AdvisorShares Vice ETF. It trades about -0.11 of its total potential returns per unit of risk. AdvisorShares Vice ETF is currently generating about 0.25 per unit of volatility. If you would invest  3,042  in AdvisorShares Vice ETF on September 3, 2024 and sell it today you would earn a total of  338.00  from holding AdvisorShares Vice ETF or generate 11.11% return on investment over 90 days.

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

iShares Global Clean  vs.  AdvisorShares Vice ETF

iShares Global Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

AdvisorShares Vice ETF

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Vice ETF are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, AdvisorShares Vice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IShares Global and AdvisorShares Vice

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

The idea behind iShares Global Clean and AdvisorShares Vice ETF 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.