Correlation Between IShares Dividend and Themes European

Can any of the company-specific risk be diversified away by investing in both IShares Dividend and Themes European 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 Themes European 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 Themes European Luxury, you can compare the effects of market volatilities on IShares Dividend and Themes European 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 Themes European. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dividend and Themes European.

Diversification Opportunities for IShares Dividend and Themes European

0.84

Correlation Coefficient

IShares Dividend  Themes European

Very poor diversification

The 3 months correlation between IShares and Themes is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and Themes European Luxury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes European Luxury 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 Themes European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes European Luxury has no effect on the direction of IShares Dividend i.e., IShares Dividend and Themes European go up and down completely randomly.

Pair Corralation between IShares Dividend and Themes European

Given the investment horizon of 90 days iShares Dividend and is expected to generate 0.68 times more return on investment than Themes European. However, iShares Dividend and is 1.48 times less risky than Themes European. It trades about 0.04 of its potential returns per unit of risk. Themes European Luxury is currently generating about -0.06 per unit of risk. If you would invest  4,765  in iShares Dividend and on December 26, 2024 and sell it today you would earn a total of  92.00  from holding iShares Dividend and or generate 1.93% return on investment over 90 days.

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

iShares Dividend and  vs.  Themes European Luxury

iShares Dividend

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Dividend is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Themes European Luxury

Risk-Adjusted Performance

Very Weak

Over the last 90 days Themes European Luxury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Themes European is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Dividend and Themes European

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

The idea behind iShares Dividend and and Themes European Luxury 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.