Correlation Between IShares Trust and ERShares Private

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

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

Diversification Opportunities for IShares Trust and ERShares Private

0.96

Correlation Coefficient

IShares Trust  ERShares Private

Almost no diversification

The 3 months correlation between IShares and ERShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and ERShares Private Public Crosso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ERShares Private Public and IShares Trust 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 Trust are associated (or correlated) with ERShares Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ERShares Private Public has no effect on the direction of IShares Trust i.e., IShares Trust and ERShares Private go up and down completely randomly.

Pair Corralation between IShares Trust and ERShares Private

Given the investment horizon of 90 days iShares Trust is expected to under-perform the ERShares Private. But the etf apears to be less risky and, when comparing its historical volatility, iShares Trust is 1.04 times less risky than ERShares Private. The etf trades about -0.13 of its potential returns per unit of risk. The ERShares Private Public Crossover is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,825  in ERShares Private Public Crossover on December 29, 2024 and sell it today you would lose (210.00) from holding ERShares Private Public Crossover or give up 11.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

iShares Trust   vs.  ERShares Private Public Crosso

iShares Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic 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.

ERShares Private Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days ERShares Private Public Crossover has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with IShares Trust and ERShares Private

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

The idea behind iShares Trust and ERShares Private Public Crossover 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.