Correlation Between IShares SP and Pinnacle Focused

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

By analyzing existing cross correlation between iShares SP Mid Cap and Pinnacle Focused Opportunities, you can compare the effects of market volatilities on IShares SP and Pinnacle Focused 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 SP with a short position of Pinnacle Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Pinnacle Focused.

Diversification Opportunities for IShares SP and Pinnacle Focused

0.95

Correlation Coefficient

IShares SP  Pinnacle Focused

Almost no diversification

The 3 months correlation between IShares and Pinnacle is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Mid Cap and Pinnacle Focused Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Focused Opp and IShares SP 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 SP Mid Cap are associated (or correlated) with Pinnacle Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Focused Opp has no effect on the direction of IShares SP i.e., IShares SP and Pinnacle Focused go up and down completely randomly.

Pair Corralation between IShares SP and Pinnacle Focused

Considering the 90-day investment horizon iShares SP Mid Cap is expected to generate 0.4 times more return on investment than Pinnacle Focused. However, iShares SP Mid Cap is 2.51 times less risky than Pinnacle Focused. It trades about -0.11 of its potential returns per unit of risk. Pinnacle Focused Opportunities is currently generating about -0.1 per unit of risk. If you would invest  9,094  in iShares SP Mid Cap on December 30, 2024 and sell it today you would lose (777.00) from holding iShares SP Mid Cap or give up 8.54% of portfolio value over 90 days.

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

iShares SP Mid Cap  vs.  Pinnacle Focused Opportunities

iShares SP Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares SP Mid Cap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's forward-looking indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pinnacle Focused Opp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinnacle Focused Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent 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.

Pair Trading with IShares SP and Pinnacle Focused

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

The idea behind iShares SP Mid Cap and Pinnacle Focused Opportunities 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.