Correlation Between IShares Silver and Abrdn Physical

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

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

Diversification Opportunities for IShares Silver and Abrdn Physical

1.0

Correlation Coefficient

IShares Silver  Abrdn Physical

No risk reduction

The 3 months correlation between IShares and Abrdn is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and abrdn Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Physical Silver and IShares Silver 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 Silver Trust are associated (or correlated) with Abrdn Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Physical Silver has no effect on the direction of IShares Silver i.e., IShares Silver and Abrdn Physical go up and down completely randomly.

Pair Corralation between IShares Silver and Abrdn Physical

Considering the 90-day investment horizon IShares Silver is expected to generate 1.01 times less return on investment than Abrdn Physical. But when comparing it to its historical volatility, iShares Silver Trust is 1.0 times less risky than Abrdn Physical. It trades about 0.06 of its potential returns per unit of risk. abrdn Physical Silver is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,854  in abrdn Physical Silver on September 12, 2024 and sell it today you would earn a total of  188.00  from holding abrdn Physical Silver or generate 6.59% return on investment over 90 days.

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

iShares Silver Trust  vs.  abrdn Physical Silver

iShares Silver Trust

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Silver Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, IShares Silver may actually be approaching a critical reversion point that can send shares even higher in January 2025.

abrdn Physical Silver

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Silver are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Abrdn Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IShares Silver and Abrdn Physical

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

The idea behind iShares Silver Trust and abrdn Physical Silver 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.