Correlation Between IShares Core and Elevation Series

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

By analyzing existing cross correlation between iShares Core SP and Elevation Series Trust, you can compare the effects of market volatilities on IShares Core and Elevation Series 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 Elevation Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Elevation Series.

Diversification Opportunities for IShares Core and Elevation Series

0.92

Correlation Coefficient

IShares Core  Elevation Series

Almost no diversification

The 3 months correlation between IShares and Elevation is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Elevation Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Series Trust 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 SP are associated (or correlated) with Elevation Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Series Trust has no effect on the direction of IShares Core i.e., IShares Core and Elevation Series go up and down completely randomly.

Pair Corralation between IShares Core and Elevation Series

Considering the 90-day investment horizon iShares Core SP is expected to generate 1.03 times more return on investment than Elevation Series. However, IShares Core is 1.03 times more volatile than Elevation Series Trust. It trades about 0.14 of its potential returns per unit of risk. Elevation Series Trust is currently generating about 0.13 per unit of risk. If you would invest  6,165  in iShares Core SP on August 30, 2024 and sell it today you would earn a total of  567.00  from holding iShares Core SP or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Core SP  vs.  Elevation Series Trust

iShares Core SP

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Elevation Series Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Series Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Elevation Series may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with IShares Core and Elevation Series

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

The idea behind iShares Core SP and Elevation Series Trust 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.