Correlation Between IShares and Defiance ETFs

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

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

Diversification Opportunities for IShares and Defiance ETFs

0.0

Correlation Coefficient

IShares  Defiance ETFs

Pay attention - limited upside

The 3 months correlation between IShares and Defiance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Defiance ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance ETFs and IShares 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 are associated (or correlated) with Defiance ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance ETFs has no effect on the direction of IShares i.e., IShares and Defiance ETFs go up and down completely randomly.

Pair Corralation between IShares and Defiance ETFs

If you would invest (100.00) in Defiance ETFs on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Defiance ETFs or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

IShares  vs.  Defiance ETFs

IShares

Risk-Adjusted Performance

Very Weak

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

Defiance ETFs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Defiance ETFs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Defiance ETFs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IShares and Defiance ETFs

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

The idea behind IShares and Defiance ETFs 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.