Correlation Between IShares Core and Opus Small
Can any of the company-specific risk be diversified away by investing in both IShares Core and Opus Small 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 Opus Small 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 Opus Small Cap, you can compare the effects of market volatilities on IShares Core and Opus Small 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 Opus Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Opus Small.
Diversification Opportunities for IShares Core and Opus Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Opus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Opus Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opus Small Cap 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 Opus Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opus Small Cap has no effect on the direction of IShares Core i.e., IShares Core and Opus Small go up and down completely randomly.
Pair Corralation between IShares Core and Opus Small
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.68 times more return on investment than Opus Small. However, iShares Core SP is 1.48 times less risky than Opus Small. It trades about 0.19 of its potential returns per unit of risk. Opus Small Cap is currently generating about 0.08 per unit of risk. If you would invest 56,400 in iShares Core SP on September 17, 2024 and sell it today you would earn a total of 4,663 from holding iShares Core SP or generate 8.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.46% |
Values | Daily Returns |
iShares Core SP vs. Opus Small Cap
Performance |
Timeline |
iShares Core SP |
Opus Small Cap |
IShares Core and Opus Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and Opus Small
The main advantage of trading using opposite IShares Core and Opus Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Opus Small 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 Opus Small will offset losses from the drop in Opus Small's long position.IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
Opus Small vs. Aptus Defined Risk | Opus Small vs. Aptus Collared Income | Opus Small vs. Aptus Drawdown Managed | Opus Small vs. RiverFront Dynamic Dividend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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