Correlation Between IShares Global and Guinness Atkinson

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

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

Diversification Opportunities for IShares Global and Guinness Atkinson

0.72

Correlation Coefficient

IShares Global  Guinness Atkinson

Poor diversification

The 3 months correlation between IShares and Guinness is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Comm and Guinness Atkinson Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Asset 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 Comm are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Asset has no effect on the direction of IShares Global i.e., IShares Global and Guinness Atkinson go up and down completely randomly.

Pair Corralation between IShares Global and Guinness Atkinson

Considering the 90-day investment horizon iShares Global Comm is expected to generate 1.0 times more return on investment than Guinness Atkinson. However, IShares Global is 1.0 times more volatile than Guinness Atkinson Asset. It trades about 0.21 of its potential returns per unit of risk. Guinness Atkinson Asset is currently generating about 0.18 per unit of risk. If you would invest  9,047  in iShares Global Comm on September 16, 2024 and sell it today you would earn a total of  1,027  from holding iShares Global Comm or generate 11.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	55.38%
Values	Daily Returns

iShares Global Comm  vs.  Guinness Atkinson Asset

iShares Global Comm

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Comm are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, IShares Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guinness Atkinson Asset

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Guinness Atkinson Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, Guinness Atkinson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IShares Global and Guinness Atkinson

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

The idea behind iShares Global Comm and Guinness Atkinson Asset 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.