Correlation Between Advocate Capital and IShares Core

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

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

Diversification Opportunities for Advocate Capital and IShares Core

0.0

Correlation Coefficient

Advocate Capital  IShares Core

Pay attention - limited upside

The 3 months correlation between Advocate and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advocate Capital Management and iShares Core Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Growth and Advocate Capital 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 Advocate Capital Management are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Growth has no effect on the direction of Advocate Capital i.e., Advocate Capital and IShares Core go up and down completely randomly.

Pair Corralation between Advocate Capital and IShares Core

If you would invest (100.00) in Advocate Capital Management on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Advocate Capital Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advocate Capital Management  vs.  iShares Core Growth

Advocate Capital Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advocate Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advocate Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Core Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Core Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Advocate Capital and IShares Core

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

The idea behind Advocate Capital Management and iShares Core Growth 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.