Correlation Between IShares Core and QRAFT AI

Can any of the company-specific risk be diversified away by investing in both IShares Core and QRAFT AI 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 QRAFT AI 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 QRAFT AI Enhanced Large, you can compare the effects of market volatilities on IShares Core and QRAFT AI 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 QRAFT AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and QRAFT AI.

Diversification Opportunities for IShares Core and QRAFT AI

0.89

Correlation Coefficient

IShares Core  QRAFT AI

Very poor diversification

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

Pair Corralation between IShares Core and QRAFT AI

Given the investment horizon of 90 days iShares Core SP is expected to under-perform the QRAFT AI. In addition to that, IShares Core is 1.37 times more volatile than QRAFT AI Enhanced Large. It trades about -0.11 of its total potential returns per unit of risk. QRAFT AI Enhanced Large is currently generating about -0.06 per unit of volatility. If you would invest  5,320  in QRAFT AI Enhanced Large on December 28, 2024 and sell it today you would lose (230.00) from holding QRAFT AI Enhanced Large or give up 4.32% 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.  QRAFT AI Enhanced Large

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.

QRAFT AI Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days QRAFT AI Enhanced Large has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, QRAFT AI is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Core and QRAFT AI

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

The idea behind iShares Core SP and QRAFT AI Enhanced Large 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.