Correlation Between IShares Core and Expat Slovakia

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

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

Diversification Opportunities for IShares Core and Expat Slovakia

0.36

Correlation Coefficient

IShares Core  Expat Slovakia

Weak diversification

The 3 months correlation between IShares and Expat is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Expat Slovakia Sax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Slovakia Sax and IShares Core 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 Core MSCI are associated (or correlated) with Expat Slovakia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Slovakia Sax has no effect on the direction of IShares Core i.e., IShares Core and Expat Slovakia go up and down completely randomly.

Pair Corralation between IShares Core and Expat Slovakia

Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 0.97 times more return on investment than Expat Slovakia. However, iShares Core MSCI is 1.03 times less risky than Expat Slovakia. It trades about -0.01 of its potential returns per unit of risk. Expat Slovakia Sax is currently generating about -0.03 per unit of risk. If you would invest  3,339  in iShares Core MSCI on October 22, 2024 and sell it today you would lose (15.00) from holding iShares Core MSCI or give up 0.45% of portfolio value over 90 days.

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

iShares Core MSCI  vs.  Expat Slovakia Sax

iShares Core MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

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

Expat Slovakia Sax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expat Slovakia Sax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expat Slovakia is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Core and Expat Slovakia

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

The idea behind iShares Core MSCI and Expat Slovakia Sax 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.