Correlation Between ISharesGlobal 100 and IShares Core
Can any of the company-specific risk be diversified away by investing in both ISharesGlobal 100 and IShares Core 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 ISharesGlobal 100 and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSharesGlobal 100 and iShares Core SP, you can compare the effects of market volatilities on ISharesGlobal 100 and IShares Core 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 ISharesGlobal 100 with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISharesGlobal 100 and IShares Core.
Diversification Opportunities for ISharesGlobal 100 and IShares Core
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ISharesGlobal and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iSharesGlobal 100 and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and ISharesGlobal 100 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 iSharesGlobal 100 are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of ISharesGlobal 100 i.e., ISharesGlobal 100 and IShares Core go up and down completely randomly.
Pair Corralation between ISharesGlobal 100 and IShares Core
Assuming the 90 days trading horizon iSharesGlobal 100 is expected to generate 0.76 times more return on investment than IShares Core. However, iSharesGlobal 100 is 1.32 times less risky than IShares Core. It trades about 0.53 of its potential returns per unit of risk. iShares Core SP is currently generating about -0.18 per unit of risk. If you would invest 15,109 in iSharesGlobal 100 on September 25, 2024 and sell it today you would earn a total of 1,259 from holding iSharesGlobal 100 or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iSharesGlobal 100 vs. iShares Core SP
Performance |
Timeline |
iSharesGlobal 100 |
iShares Core SP |
ISharesGlobal 100 and IShares Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ISharesGlobal 100 and IShares Core
The main advantage of trading using opposite ISharesGlobal 100 and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISharesGlobal 100 position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.ISharesGlobal 100 vs. VanEck Global Listed | ISharesGlobal 100 vs. BetaShares Crypto Innovators | ISharesGlobal 100 vs. BetaShares Global Government | ISharesGlobal 100 vs. BetaShares Geared Australian |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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