Correlation Between IShares Core and EGSHARES BLUE

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

By analyzing existing cross correlation between iShares Core SP and EGSHARES BLUE CHIP, you can compare the effects of market volatilities on IShares Core and EGSHARES BLUE 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 EGSHARES BLUE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and EGSHARES BLUE.

Diversification Opportunities for IShares Core and EGSHARES BLUE

0.89

Correlation Coefficient

IShares Core  EGSHARES BLUE

Very poor diversification

The 3 months correlation between IShares and EGSHARES is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and EGSHARES BLUE CHIP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGSHARES BLUE CHIP 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 SP are associated (or correlated) with EGSHARES BLUE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGSHARES BLUE CHIP has no effect on the direction of IShares Core i.e., IShares Core and EGSHARES BLUE go up and down completely randomly.

Pair Corralation between IShares Core and EGSHARES BLUE

Given the investment horizon of 90 days iShares Core SP is expected to under-perform the EGSHARES BLUE. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core SP is 1.47 times less risky than EGSHARES BLUE. The etf trades about -0.11 of its potential returns per unit of risk. The EGSHARES BLUE CHIP is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,430  in EGSHARES BLUE CHIP on December 30, 2024 and sell it today you would lose (213.00) from holding EGSHARES BLUE CHIP or give up 6.21% of portfolio value over 90 days.

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

iShares Core SP  vs.  EGSHARES BLUE CHIP

iShares Core SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Core SP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

EGSHARES BLUE CHIP

Risk-Adjusted Performance

Very Weak

Over the last 90 days EGSHARES BLUE CHIP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, EGSHARES BLUE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IShares Core and EGSHARES BLUE

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

The idea behind iShares Core SP and EGSHARES BLUE CHIP 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.