Correlation Between IShares Consumer and Kelly Strategic

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

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

Diversification Opportunities for IShares Consumer and Kelly Strategic

0.55

Correlation Coefficient

IShares Consumer  Kelly Strategic

Very weak diversification

The 3 months correlation between IShares and Kelly is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Discretionary and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic Mana and IShares Consumer 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 Consumer Discretionary are associated (or correlated) with Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of IShares Consumer i.e., IShares Consumer and Kelly Strategic go up and down completely randomly.

Pair Corralation between IShares Consumer and Kelly Strategic

If you would invest  8,221  in iShares Consumer Discretionary on October 3, 2024 and sell it today you would earn a total of  1,393  from holding iShares Consumer Discretionary or generate 16.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.19%
Values	Daily Returns

iShares Consumer Discretionary  vs.  Kelly Strategic Management

iShares Consumer Dis

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Consumer Discretionary are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, IShares Consumer may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Strategic Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kelly Strategic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares Consumer and Kelly Strategic

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

The idea behind iShares Consumer Discretionary and Kelly Strategic Management 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.