Correlation Between IShares Global and Tremblant Global

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

By analyzing existing cross correlation between iShares Global 100 and Tremblant Global ETF, you can compare the effects of market volatilities on IShares Global and Tremblant Global 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 Global with a short position of Tremblant Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Tremblant Global.

Diversification Opportunities for IShares Global and Tremblant Global

0.73

Correlation Coefficient

IShares Global  Tremblant Global

Poor diversification

The 3 months correlation between IShares and Tremblant is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global 100 and Tremblant Global ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tremblant Global ETF and IShares Global 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 Global 100 are associated (or correlated) with Tremblant Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tremblant Global ETF has no effect on the direction of IShares Global i.e., IShares Global and Tremblant Global go up and down completely randomly.

Pair Corralation between IShares Global and Tremblant Global

Considering the 90-day investment horizon iShares Global 100 is expected to under-perform the Tremblant Global. But the etf apears to be less risky and, when comparing its historical volatility, iShares Global 100 is 1.17 times less risky than Tremblant Global. The etf trades about -0.07 of its potential returns per unit of risk. The Tremblant Global ETF is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,013  in Tremblant Global ETF on December 30, 2024 and sell it today you would lose (102.00) from holding Tremblant Global ETF or give up 3.39% of portfolio value over 90 days.

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

iShares Global 100  vs.  Tremblant Global ETF

iShares Global 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Global 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Tremblant Global ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tremblant Global ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Tremblant Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Global and Tremblant Global

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

The idea behind iShares Global 100 and Tremblant Global ETF 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.