Correlation Between Investment Managers and IShares Dividend

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

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

Diversification Opportunities for Investment Managers and IShares Dividend

0.65

Correlation Coefficient

Investment Managers  IShares Dividend

Poor diversification

The 3 months correlation between Investment and IShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and iShares Dividend and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend and Investment Managers 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 Investment Managers Series are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend has no effect on the direction of Investment Managers i.e., Investment Managers and IShares Dividend go up and down completely randomly.

Pair Corralation between Investment Managers and IShares Dividend

Considering the 90-day investment horizon Investment Managers Series is expected to under-perform the IShares Dividend. But the etf apears to be less risky and, when comparing its historical volatility, Investment Managers Series is 1.12 times less risky than IShares Dividend. The etf trades about 0.0 of its potential returns per unit of risk. The iShares Dividend and is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,848  in iShares Dividend and on October 26, 2024 and sell it today you would earn a total of  58.00  from holding iShares Dividend and or generate 1.2% return on investment over 90 days.

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

Investment Managers Series  vs.  iShares Dividend and

Investment Managers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment Managers Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Investment Managers is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

iShares Dividend

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Dividend is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Investment Managers and IShares Dividend

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

The idea behind Investment Managers Series and iShares Dividend and 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.