Correlation Between IShares VII and Expat Macedonia

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

By analyzing existing cross correlation between iShares VII PLC and Expat Macedonia Mbi10, you can compare the effects of market volatilities on IShares VII and Expat Macedonia 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 Expat Macedonia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Expat Macedonia.

Diversification Opportunities for IShares VII and Expat Macedonia

0.61

Correlation Coefficient

IShares VII  Expat Macedonia

Poor diversification

The 3 months correlation between IShares and Expat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and Expat Macedonia Mbi10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Macedonia Mbi10 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 Expat Macedonia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Macedonia Mbi10 has no effect on the direction of IShares VII i.e., IShares VII and Expat Macedonia go up and down completely randomly.

Pair Corralation between IShares VII and Expat Macedonia

Assuming the 90 days trading horizon IShares VII is expected to generate 1.54 times less return on investment than Expat Macedonia. In addition to that, IShares VII is 1.36 times more volatile than Expat Macedonia Mbi10. It trades about 0.06 of its total potential returns per unit of risk. Expat Macedonia Mbi10 is currently generating about 0.13 per unit of volatility. If you would invest  153.00  in Expat Macedonia Mbi10 on September 17, 2024 and sell it today you would earn a total of  96.00  from holding Expat Macedonia Mbi10 or generate 62.75% return on investment over 90 days.

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

iShares VII PLC  vs.  Expat Macedonia Mbi10

iShares VII PLC

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares VII PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IShares VII may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Expat Macedonia Mbi10

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Macedonia Mbi10 are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Expat Macedonia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IShares VII and Expat Macedonia

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

The idea behind iShares VII PLC and Expat Macedonia Mbi10 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.