Correlation Between IShares Silver and United States

Can any of the company-specific risk be diversified away by investing in both IShares Silver and United States 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 United States 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 United States 12, you can compare the effects of market volatilities on IShares Silver and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and United States.

Diversification Opportunities for IShares Silver and United States

-0.29

Correlation Coefficient

IShares Silver  United States

Very good diversification

The 3 months correlation between IShares and United is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and United States 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 12 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States 12 has no effect on the direction of IShares Silver i.e., IShares Silver and United States go up and down completely randomly.

Pair Corralation between IShares Silver and United States

Considering the 90-day investment horizon IShares Silver is expected to generate 2.91 times less return on investment than United States. In addition to that, IShares Silver is 1.26 times more volatile than United States 12. It trades about 0.11 of its total potential returns per unit of risk. United States 12 is currently generating about 0.42 per unit of volatility. If you would invest  3,691  in United States 12 on October 21, 2024 and sell it today you would earn a total of  294.00  from holding United States 12 or generate 7.97% return on investment over 90 days.

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

iShares Silver Trust  vs.  United States 12

iShares Silver Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Silver Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's essential indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

United States 12

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States 12 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with IShares Silver and United States

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

The idea behind iShares Silver Trust and United States 12 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.