Correlation Between IShares Core and HANetf II

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

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

Diversification Opportunities for IShares Core and HANetf II

0.4

Correlation Coefficient

IShares Core  HANetf II

Very weak diversification

The 3 months correlation between IShares and HANetf is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and HANetf II ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf II ICAV and IShares Core 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 Core SP are associated (or correlated) with HANetf II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf II ICAV has no effect on the direction of IShares Core i.e., IShares Core and HANetf II go up and down completely randomly.

Pair Corralation between IShares Core and HANetf II

Assuming the 90 days trading horizon iShares Core SP is expected to under-perform the HANetf II. In addition to that, IShares Core is 1.37 times more volatile than HANetf II ICAV. It trades about -0.22 of its total potential returns per unit of risk. HANetf II ICAV is currently generating about -0.07 per unit of volatility. If you would invest  751.00  in HANetf II ICAV on December 11, 2024 and sell it today you would lose (20.00) from holding HANetf II ICAV or give up 2.66% of portfolio value over 90 days.

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

iShares Core SP  vs.  HANetf II ICAV

iShares Core SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Core SP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

HANetf II ICAV

Risk-Adjusted Performance

Very Weak

Over the last 90 days HANetf II ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, HANetf II is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Core and HANetf II

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

The idea behind iShares Core SP and HANetf II ICAV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..