Correlation Between IShares SP and DWS

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

By analyzing existing cross correlation between iShares SP 500 and DWS, you can compare the effects of market volatilities on IShares SP and DWS 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 SP with a short position of DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and DWS.

Diversification Opportunities for IShares SP and DWS

-0.04

Correlation Coefficient

IShares SP  DWS

Good diversification

The 3 months correlation between IShares and DWS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS and IShares SP 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 SP 500 are associated (or correlated) with DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of IShares SP i.e., IShares SP and DWS go up and down completely randomly.

Pair Corralation between IShares SP and DWS

If you would invest  2,487  in DWS on September 29, 2024 and sell it today you would earn a total of  0.00  from holding DWS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

iShares SP 500  vs.  DWS

iShares SP 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares SP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DWS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IShares SP and DWS

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

The idea behind iShares SP 500 and DWS 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.