Correlation Between IShares VII and Source KBW
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By analyzing existing cross correlation between iShares VII PLC and Source KBW NASDAQ, you can compare the effects of market volatilities on IShares VII and Source KBW 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 VII with a short position of Source KBW. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Source KBW.
Diversification Opportunities for IShares VII and Source KBW
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Source is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and Source KBW NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source KBW NASDAQ and IShares VII 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 VII PLC are associated (or correlated) with Source KBW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source KBW NASDAQ has no effect on the direction of IShares VII i.e., IShares VII and Source KBW go up and down completely randomly.
Pair Corralation between IShares VII and Source KBW
Assuming the 90 days trading horizon iShares VII PLC is expected to generate 0.63 times more return on investment than Source KBW. However, iShares VII PLC is 1.58 times less risky than Source KBW. It trades about -0.14 of its potential returns per unit of risk. Source KBW NASDAQ is currently generating about -0.18 per unit of risk. If you would invest 25,115 in iShares VII PLC on December 11, 2024 and sell it today you would lose (1,870) from holding iShares VII PLC or give up 7.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.31% |
Values | Daily Returns |
iShares VII PLC vs. Source KBW NASDAQ
Performance |
Timeline |
iShares VII PLC |
Source KBW NASDAQ |
IShares VII and Source KBW Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares VII and Source KBW
The main advantage of trading using opposite IShares VII and Source KBW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, Source KBW 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 Source KBW will offset losses from the drop in Source KBW's long position.IShares VII vs. iShares Govt Bond | IShares VII vs. iShares Global AAA AA | IShares VII vs. iShares Smart City | IShares VII vs. iShares Broad High |
Source KBW vs. UBS Fund Solutions | Source KBW vs. Xtrackers II | Source KBW vs. Xtrackers Nikkei 225 | Source KBW vs. iShares VII PLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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