Correlation Between 3I Group and IShares Physical
Can any of the company-specific risk be diversified away by investing in both 3I Group and IShares Physical 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 3I Group and IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3I Group PLC and iShares Physical Platinum, you can compare the effects of market volatilities on 3I Group and IShares Physical 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 3I Group with a short position of IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3I Group and IShares Physical.
Diversification Opportunities for 3I Group and IShares Physical
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between III and IShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding 3I Group PLC and iShares Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Platinum and 3I Group 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 3I Group PLC are associated (or correlated) with IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Platinum has no effect on the direction of 3I Group i.e., 3I Group and IShares Physical go up and down completely randomly.
Pair Corralation between 3I Group and IShares Physical
Assuming the 90 days trading horizon 3I Group PLC is expected to generate 1.14 times more return on investment than IShares Physical. However, 3I Group is 1.14 times more volatile than iShares Physical Platinum. It trades about 0.07 of its potential returns per unit of risk. iShares Physical Platinum is currently generating about 0.03 per unit of risk. If you would invest 331,326 in 3I Group PLC on September 23, 2024 and sell it today you would earn a total of 23,474 from holding 3I Group PLC or generate 7.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
3I Group PLC vs. iShares Physical Platinum
Performance |
Timeline |
3I Group PLC |
iShares Physical Platinum |
3I Group and IShares Physical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3I Group and IShares Physical
The main advantage of trading using opposite 3I Group and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3I Group position performs unexpectedly, IShares Physical 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 Physical will offset losses from the drop in IShares Physical's long position.3I Group vs. McEwen Mining | 3I Group vs. Panther Metals PLC | 3I Group vs. Molson Coors Beverage | 3I Group vs. Jacquet Metal Service |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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