Correlation Between 3iQ CoinShares and IShares Core

Can any of the company-specific risk be diversified away by investing in both 3iQ CoinShares and IShares Core 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 3iQ CoinShares and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3iQ CoinShares Ether and iShares Core SP, you can compare the effects of market volatilities on 3iQ CoinShares and IShares Core 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 3iQ CoinShares with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ CoinShares and IShares Core.

Diversification Opportunities for 3iQ CoinShares and IShares Core

0.62

Correlation Coefficient

3iQ CoinShares  IShares Core

Poor diversification

The 3 months correlation between 3iQ and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ CoinShares Ether and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and 3iQ CoinShares 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 3iQ CoinShares Ether are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of 3iQ CoinShares i.e., 3iQ CoinShares and IShares Core go up and down completely randomly.

Pair Corralation between 3iQ CoinShares and IShares Core

Assuming the 90 days trading horizon 3iQ CoinShares Ether is expected to under-perform the IShares Core. In addition to that, 3iQ CoinShares is 4.57 times more volatile than iShares Core SP. It trades about -0.18 of its total potential returns per unit of risk. iShares Core SP is currently generating about -0.09 per unit of volatility. If you would invest  6,233  in iShares Core SP on December 30, 2024 and sell it today you would lose (363.00) from holding iShares Core SP or give up 5.82% of portfolio value over 90 days.

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

3iQ CoinShares Ether  vs.  iShares Core SP

3iQ CoinShares Ether

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3iQ CoinShares Ether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

iShares Core SP

Risk-Adjusted Performance

Very Weak

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

Pair Trading with 3iQ CoinShares and IShares Core

The main advantage of trading using opposite 3iQ CoinShares and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ CoinShares position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.

The idea behind 3iQ CoinShares Ether and iShares Core SP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.