Correlation Between Listed Funds and IShares 10

Can any of the company-specific risk be diversified away by investing in both Listed Funds and IShares 10 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 Listed Funds and IShares 10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Listed Funds Trust and iShares 10 Year, you can compare the effects of market volatilities on Listed Funds and IShares 10 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 Listed Funds with a short position of IShares 10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Listed Funds and IShares 10.

Diversification Opportunities for Listed Funds and IShares 10

-0.32

Correlation Coefficient

Listed Funds  IShares 10

Very good diversification

The 3 months correlation between Listed and IShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Listed Funds Trust and iShares 10 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 10 Year and Listed Funds 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 Listed Funds Trust are associated (or correlated) with IShares 10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 10 Year has no effect on the direction of Listed Funds i.e., Listed Funds and IShares 10 go up and down completely randomly.

Pair Corralation between Listed Funds and IShares 10

Given the investment horizon of 90 days Listed Funds Trust is expected to generate 0.26 times more return on investment than IShares 10. However, Listed Funds Trust is 3.86 times less risky than IShares 10. It trades about 0.1 of its potential returns per unit of risk. iShares 10 Year is currently generating about -0.08 per unit of risk. If you would invest  2,666  in Listed Funds Trust on September 22, 2024 and sell it today you would earn a total of  23.00  from holding Listed Funds Trust or generate 0.86% return on investment over 90 days.

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

Listed Funds Trust  vs.  iShares 10 Year

Listed Funds Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Listed Funds Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Listed Funds is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

iShares 10 Year

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares 10 Year has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Listed Funds and IShares 10

The main advantage of trading using opposite Listed Funds and IShares 10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Listed Funds position performs unexpectedly, IShares 10 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 10 will offset losses from the drop in IShares 10's long position.

The idea behind Listed Funds Trust and iShares 10 Year 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.