Correlation Between IShares Core and Van Eck

Can any of the company-specific risk be diversified away by investing in both IShares Core and Van Eck 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 Van Eck 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 Van Eck, you can compare the effects of market volatilities on IShares Core and Van Eck 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 Van Eck. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Van Eck.

Diversification Opportunities for IShares Core and Van Eck

0.77

Correlation Coefficient

IShares Core  Van Eck

Poor diversification

The 3 months correlation between IShares and Van is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Van Eck in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Eck 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 Van Eck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Eck has no effect on the direction of IShares Core i.e., IShares Core and Van Eck go up and down completely randomly.

Pair Corralation between IShares Core and Van Eck

If you would invest  2,767  in Van Eck on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Van Eck or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

iShares Core SP  vs.  Van Eck

iShares Core SP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Van Eck

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Van Eck has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Van Eck is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Core and Van Eck

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

The idea behind iShares Core SP and Van Eck 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.