Correlation Between IShares Treasury and Ctac NV

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

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

Diversification Opportunities for IShares Treasury and Ctac NV

0.32

Correlation Coefficient

IShares Treasury  Ctac NV

Weak diversification

The 3 months correlation between IShares and Ctac is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Bond and Ctac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ctac NV and IShares Treasury 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 Treasury Bond are associated (or correlated) with Ctac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ctac NV has no effect on the direction of IShares Treasury i.e., IShares Treasury and Ctac NV go up and down completely randomly.

Pair Corralation between IShares Treasury and Ctac NV

Assuming the 90 days trading horizon iShares Treasury Bond is expected to generate 0.45 times more return on investment than Ctac NV. However, iShares Treasury Bond is 2.23 times less risky than Ctac NV. It trades about 0.15 of its potential returns per unit of risk. Ctac NV is currently generating about -0.14 per unit of risk. If you would invest  12,293  in iShares Treasury Bond on October 22, 2024 and sell it today you would earn a total of  173.00  from holding iShares Treasury Bond or generate 1.41% return on investment over 90 days.

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

iShares Treasury Bond  vs.  Ctac NV

iShares Treasury Bond

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Treasury Bond are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares Treasury is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ctac NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ctac NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ctac NV is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Treasury and Ctac NV

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

The idea behind iShares Treasury Bond and Ctac NV 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.