Correlation Between Trend Etf and IShares Trust

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

By analyzing existing cross correlation between Trend Etf Msci and iShares Trust , you can compare the effects of market volatilities on Trend Etf and IShares Trust 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 Trend Etf with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trend Etf and IShares Trust.

Diversification Opportunities for Trend Etf and IShares Trust

0.87

Correlation Coefficient

Trend Etf  IShares Trust

Very poor diversification

The 3 months correlation between Trend and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Trend Etf Msci and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Trend Etf 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 Trend Etf Msci are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Trend Etf i.e., Trend Etf and IShares Trust go up and down completely randomly.

Pair Corralation between Trend Etf and IShares Trust

Assuming the 90 days trading horizon Trend Etf Msci is expected to generate 0.57 times more return on investment than IShares Trust. However, Trend Etf Msci is 1.74 times less risky than IShares Trust. It trades about 0.15 of its potential returns per unit of risk. iShares Trust is currently generating about -0.05 per unit of risk. If you would invest  1,452  in Trend Etf Msci on September 23, 2024 and sell it today you would earn a total of  49.00  from holding Trend Etf Msci or generate 3.37% return on investment over 90 days.

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

Trend Etf Msci  vs.  iShares Trust

Trend Etf Msci

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trend Etf Msci are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Trend Etf may actually be approaching a critical reversion point that can send shares even higher in January 2025.

iShares Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Trend Etf and IShares Trust

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

The idea behind Trend Etf Msci and iShares 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..