Correlation Between IShares Dividend and MicroSectors FANG

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

Diversification Opportunities for IShares Dividend and MicroSectors FANG

0.23

Correlation Coefficient

IShares Dividend  MicroSectors FANG

Modest diversification

The 3 months correlation between IShares and MicroSectors is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of IShares Dividend i.e., IShares Dividend and MicroSectors FANG go up and down completely randomly.

Pair Corralation between IShares Dividend and MicroSectors FANG

Given the investment horizon of 90 days iShares Dividend and is expected to generate 0.4 times more return on investment than MicroSectors FANG. However, iShares Dividend and is 2.47 times less risky than MicroSectors FANG. It trades about 0.05 of its potential returns per unit of risk. MicroSectors FANG ETN is currently generating about -0.12 per unit of risk. If you would invest  4,691  in iShares Dividend and on December 30, 2024 and sell it today you would earn a total of  105.00  from holding iShares Dividend and or generate 2.24% return on investment over 90 days.

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

iShares Dividend and  vs.  MicroSectors FANG ETN

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.

MicroSectors FANG ETN

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroSectors FANG ETN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with IShares Dividend and MicroSectors FANG

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

The idea behind iShares Dividend and and MicroSectors FANG ETN 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.