Correlation Between IShares Russell and StockSnips

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

By analyzing existing cross correlation between iShares Russell 1000 and StockSnips AI Powered Sentiment, you can compare the effects of market volatilities on IShares Russell and StockSnips 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 Russell with a short position of StockSnips. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and StockSnips.

Diversification Opportunities for IShares Russell and StockSnips

0.97

Correlation Coefficient

IShares Russell  StockSnips

Almost no diversification

The 3 months correlation between IShares and StockSnips is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and StockSnips AI Powered Sentimen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StockSnips AI Powered and IShares Russell 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 Russell 1000 are associated (or correlated) with StockSnips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StockSnips AI Powered has no effect on the direction of IShares Russell i.e., IShares Russell and StockSnips go up and down completely randomly.

Pair Corralation between IShares Russell and StockSnips

Considering the 90-day investment horizon iShares Russell 1000 is expected to under-perform the StockSnips. But the etf apears to be less risky and, when comparing its historical volatility, iShares Russell 1000 is 1.09 times less risky than StockSnips. The etf trades about -0.08 of its potential returns per unit of risk. The StockSnips AI Powered Sentiment is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,854  in StockSnips AI Powered Sentiment on December 30, 2024 and sell it today you would lose (148.00) from holding StockSnips AI Powered Sentiment or give up 5.19% of portfolio value over 90 days.

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

iShares Russell 1000  vs.  StockSnips AI Powered Sentimen

iShares Russell 1000

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Russell 1000 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Russell is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

StockSnips AI Powered

Risk-Adjusted Performance

Very Weak

Over the last 90 days StockSnips AI Powered Sentiment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, StockSnips is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Russell and StockSnips

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

The idea behind iShares Russell 1000 and StockSnips AI Powered Sentiment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.