Correlation Between IShares Fundamental and Dividend Select
Can any of the company-specific risk be diversified away by investing in both IShares Fundamental and Dividend Select 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 Fundamental and Dividend Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Fundamental Hedged and Dividend Select 15, you can compare the effects of market volatilities on IShares Fundamental and Dividend Select 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 Fundamental with a short position of Dividend Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fundamental and Dividend Select.
Diversification Opportunities for IShares Fundamental and Dividend Select
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Dividend is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fundamental Hedged and Dividend Select 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Select 15 and IShares Fundamental 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 Fundamental Hedged are associated (or correlated) with Dividend Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Select 15 has no effect on the direction of IShares Fundamental i.e., IShares Fundamental and Dividend Select go up and down completely randomly.
Pair Corralation between IShares Fundamental and Dividend Select
Assuming the 90 days trading horizon IShares Fundamental is expected to generate 1.07 times less return on investment than Dividend Select. But when comparing it to its historical volatility, iShares Fundamental Hedged is 1.1 times less risky than Dividend Select. It trades about 0.18 of its potential returns per unit of risk. Dividend Select 15 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 632.00 in Dividend Select 15 on September 5, 2024 and sell it today you would earn a total of 54.00 from holding Dividend Select 15 or generate 8.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Fundamental Hedged vs. Dividend Select 15
Performance |
Timeline |
iShares Fundamental |
Dividend Select 15 |
IShares Fundamental and Dividend Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Fundamental and Dividend Select
The main advantage of trading using opposite IShares Fundamental and Dividend Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Fundamental position performs unexpectedly, Dividend Select 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 Dividend Select will offset losses from the drop in Dividend Select's long position.IShares Fundamental vs. iShares Convertible Bond | IShares Fundamental vs. iShares SP Mid Cap | IShares Fundamental vs. iShares Edge MSCI | IShares Fundamental vs. iShares Flexible Monthly |
Dividend Select vs. iShares Canadian HYBrid | Dividend Select vs. Altagas Cum Red | Dividend Select vs. European Residential Real | Dividend Select vs. iShares Fundamental Hedged |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Stocks Directory Find actively traded stocks across global markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |