Correlation Between IShares Covered and Scottish Mortgage

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

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

Diversification Opportunities for IShares Covered and Scottish Mortgage

0.0

Correlation Coefficient

IShares Covered  Scottish Mortgage

Pay attention - limited upside

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

Pair Corralation between IShares Covered and Scottish Mortgage

If you would invest  86,188  in Scottish Mortgage Investment on October 11, 2024 and sell it today you would earn a total of  12,932  from holding Scottish Mortgage Investment or generate 15.0% return on investment over 90 days.

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

IShares Covered Bond  vs.  Scottish Mortgage Investment

IShares Covered Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares Covered Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares Covered is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Scottish Mortgage

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Scottish Mortgage exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Covered and Scottish Mortgage

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

The idea behind IShares Covered Bond and Scottish Mortgage Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.