Correlation Between Exemplar Growth and IShares IG

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

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

Diversification Opportunities for Exemplar Growth and IShares IG

-0.65

Correlation Coefficient

Exemplar Growth  IShares IG

Excellent diversification

The 3 months correlation between Exemplar and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Exemplar Growth and and iShares IG Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares IG Corporate and Exemplar Growth 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 Exemplar Growth and are associated (or correlated) with IShares IG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares IG Corporate has no effect on the direction of Exemplar Growth i.e., Exemplar Growth and IShares IG go up and down completely randomly.

Pair Corralation between Exemplar Growth and IShares IG

Assuming the 90 days trading horizon Exemplar Growth and is expected to generate 0.66 times more return on investment than IShares IG. However, Exemplar Growth and is 1.51 times less risky than IShares IG. It trades about 0.13 of its potential returns per unit of risk. iShares IG Corporate is currently generating about -0.16 per unit of risk. If you would invest  2,206  in Exemplar Growth and on September 29, 2024 and sell it today you would earn a total of  57.00  from holding Exemplar Growth and or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Exemplar Growth and  vs.  iShares IG Corporate

Exemplar Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exemplar Growth and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exemplar Growth is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

iShares IG Corporate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares IG Corporate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, IShares IG is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Exemplar Growth and IShares IG

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

The idea behind Exemplar Growth and and iShares IG Corporate 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.