Correlation Between IShares Genomics and IShares Exponential

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

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

Diversification Opportunities for IShares Genomics and IShares Exponential

0.51

Correlation Coefficient

IShares Genomics  IShares Exponential

Very weak diversification

The 3 months correlation between IShares and IShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares Genomics Immunology and iShares Exponential Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Exponential and IShares Genomics 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 Genomics Immunology are associated (or correlated) with IShares Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Exponential has no effect on the direction of IShares Genomics i.e., IShares Genomics and IShares Exponential go up and down completely randomly.

Pair Corralation between IShares Genomics and IShares Exponential

Given the investment horizon of 90 days iShares Genomics Immunology is expected to under-perform the IShares Exponential. In addition to that, IShares Genomics is 1.25 times more volatile than iShares Exponential Technologies. It trades about -0.04 of its total potential returns per unit of risk. iShares Exponential Technologies is currently generating about 0.0 per unit of volatility. If you would invest  6,039  in iShares Exponential Technologies on December 20, 2024 and sell it today you would lose (20.00) from holding iShares Exponential Technologies or give up 0.33% of portfolio value over 90 days.

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

iShares Genomics Immunology  vs.  iShares Exponential Technologi

iShares Genomics Imm

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Genomics Immunology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Genomics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

iShares Exponential

Risk-Adjusted Performance

Weak

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

Pair Trading with IShares Genomics and IShares Exponential

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

The idea behind iShares Genomics Immunology and iShares Exponential Technologies 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.