Correlation Between IShares Core and Harvest Nvidia

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

Diversification Opportunities for IShares Core and Harvest Nvidia

0.7

Correlation Coefficient

IShares Core  Harvest Nvidia

Poor diversification

The 3 months correlation between IShares and Harvest is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Harvest Nvidia Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Nvidia Enhanced 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 Harvest Nvidia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Nvidia Enhanced has no effect on the direction of IShares Core i.e., IShares Core and Harvest Nvidia go up and down completely randomly.

Pair Corralation between IShares Core and Harvest Nvidia

Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.23 times more return on investment than Harvest Nvidia. However, iShares Core SP is 4.44 times less risky than Harvest Nvidia. It trades about -0.09 of its potential returns per unit of risk. Harvest Nvidia Enhanced is currently generating about -0.07 per unit of risk. If you would invest  6,129  in iShares Core SP on December 29, 2024 and sell it today you would lose (348.00) from holding iShares Core SP or give up 5.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

iShares Core SP  vs.  Harvest Nvidia Enhanced

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. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Harvest Nvidia Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Nvidia Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's technical indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with IShares Core and Harvest Nvidia

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

The idea behind iShares Core SP and Harvest Nvidia Enhanced 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.