Correlation Between IShares and BlackRock World

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

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

Diversification Opportunities for IShares and BlackRock World

-0.69

Correlation Coefficient

IShares  BlackRock World

Excellent diversification

The 3 months correlation between IShares and BlackRock is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding IShares and BlackRock World ex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock World ex and IShares 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 are associated (or correlated) with BlackRock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock World ex has no effect on the direction of IShares i.e., IShares and BlackRock World go up and down completely randomly.

Pair Corralation between IShares and BlackRock World

If you would invest  4,261  in BlackRock World ex on October 12, 2024 and sell it today you would earn a total of  136.30  from holding BlackRock World ex or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.53%
Values	Daily Returns

IShares  vs.  BlackRock World ex

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IShares is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

BlackRock World ex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock World ex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with IShares and BlackRock World

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

The idea behind IShares and BlackRock World ex 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.