Correlation Between IShares Dividend and IShares Expanded

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

Diversification Opportunities for IShares Dividend and IShares Expanded

0.37

Correlation Coefficient

IShares Dividend  IShares Expanded

Weak diversification

The 3 months correlation between IShares and IShares is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and and iShares Expanded Tech Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Expanded Tech 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 IShares Expanded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Expanded Tech has no effect on the direction of IShares Dividend i.e., IShares Dividend and IShares Expanded go up and down completely randomly.

Pair Corralation between IShares Dividend and IShares Expanded

Given the investment horizon of 90 days iShares Dividend and is expected to under-perform the IShares Expanded. But the etf apears to be less risky and, when comparing its historical volatility, iShares Dividend and is 2.24 times less risky than IShares Expanded. The etf trades about -0.14 of its potential returns per unit of risk. The iShares Expanded Tech Software is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9,771  in iShares Expanded Tech Software on October 7, 2024 and sell it today you would earn a total of  376.00  from holding iShares Expanded Tech Software or generate 3.85% 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.  iShares Expanded Tech Software

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 newest stock price disturbance, may contribute to short-term losses for the investors.

iShares Expanded Tech

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Expanded Tech Software are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, IShares Expanded showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Dividend and IShares Expanded

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

The idea behind iShares Dividend and and iShares Expanded Tech Software 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.