Correlation Between IShares Dividend and REX AI

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

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

Diversification Opportunities for IShares Dividend and REX AI

0.2

Correlation Coefficient

IShares Dividend  REX AI

Modest diversification

The 3 months correlation between IShares and REX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and REX AI Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX AI Equity and IShares Dividend 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 Dividend and are associated (or correlated) with REX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX AI Equity has no effect on the direction of IShares Dividend i.e., IShares Dividend and REX AI go up and down completely randomly.

Pair Corralation between IShares Dividend and REX AI

Given the investment horizon of 90 days iShares Dividend and is expected to under-perform the REX AI. But the etf apears to be less risky and, when comparing its historical volatility, iShares Dividend and is 1.45 times less risky than REX AI. The etf trades about -0.36 of its potential returns per unit of risk. The REX AI Equity is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,988  in REX AI Equity on October 4, 2024 and sell it today you would lose (88.00) from holding REX AI Equity or give up 1.76% of portfolio value over 90 days.

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

iShares Dividend and  vs.  REX AI Equity

iShares Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Dividend and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

REX AI Equity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in REX AI Equity are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, REX AI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with IShares Dividend and REX AI

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

The idea behind iShares Dividend and and REX AI Equity 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .