Correlation Between IShares Global and V Square
Can any of the company-specific risk be diversified away by investing in both IShares Global and V Square 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 V Square 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 V Square Quantitative Management, you can compare the effects of market volatilities on IShares Global and V Square 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 V Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and V Square.
Diversification Opportunities for IShares Global and V Square
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and VMAT is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global 100 and V Square Quantitative Manageme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Square Quantitative 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 V Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Square Quantitative has no effect on the direction of IShares Global i.e., IShares Global and V Square go up and down completely randomly.
Pair Corralation between IShares Global and V Square
Considering the 90-day investment horizon IShares Global is expected to generate 1.13 times less return on investment than V Square. But when comparing it to its historical volatility, iShares Global 100 is 1.04 times less risky than V Square. It trades about 0.1 of its potential returns per unit of risk. V Square Quantitative Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,443 in V Square Quantitative Management on October 13, 2024 and sell it today you would earn a total of 316.00 from holding V Square Quantitative Management or generate 12.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 25.6% |
Values | Daily Returns |
iShares Global 100 vs. V Square Quantitative Manageme
Performance |
Timeline |
iShares Global 100 |
V Square Quantitative |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Global and V Square Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Global and V Square
The main advantage of trading using opposite IShares Global and V Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, V Square 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 V Square will offset losses from the drop in V Square's long position.IShares Global vs. iShares Europe ETF | IShares Global vs. iShares Global Financials | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Global Comm |
V Square vs. iShares MSCI Emerging | V Square vs. BMO Long Federal | V Square vs. iShares MSCI EAFE | V Square vs. Vanguard Total Market |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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