Correlation Between 3M and IShares
Can any of the company-specific risk be diversified away by investing in both 3M and IShares 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 3M and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and IShares, you can compare the effects of market volatilities on 3M and IShares 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 3M with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and IShares.
Diversification Opportunities for 3M and IShares
Pay attention - limited upside
The 3 months correlation between 3M and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and 3M 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 3M Company are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of 3M i.e., 3M and IShares go up and down completely randomly.
Pair Corralation between 3M and IShares
If you would invest 12,729 in 3M Company on December 5, 2024 and sell it today you would earn a total of 1,900 from holding 3M Company or generate 14.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
3M Company vs. IShares
Performance |
Timeline |
3M Company |
IShares |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
3M and IShares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3M and IShares
The main advantage of trading using opposite 3M and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
IShares vs. iShares iBonds Dec | IShares vs. iShares iBonds Dec | IShares vs. iShares Trust | IShares vs. iShares iBonds Dec |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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