Correlation Between IShares Core and Ether Fund

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

Diversification Opportunities for IShares Core and Ether Fund

0.78

Correlation Coefficient

IShares Core  Ether Fund

Poor diversification

The 3 months correlation between IShares and Ether is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund 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 Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of IShares Core i.e., IShares Core and Ether Fund go up and down completely randomly.

Pair Corralation between IShares Core and Ether Fund

Assuming the 90 days trading horizon IShares Core is expected to generate 21.01 times less return on investment than Ether Fund. But when comparing it to its historical volatility, iShares Core SP is 16.47 times less risky than Ether Fund. It trades about 0.07 of its potential returns per unit of risk. Ether Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,031  in Ether Fund on September 24, 2024 and sell it today you would earn a total of  1,205  from holding Ether Fund or generate 29.89% return on investment over 90 days.

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

iShares Core SP  vs.  Ether Fund

iShares Core SP

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Ether Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Ether Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Core and Ether Fund

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

The idea behind iShares Core SP and Ether Fund 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.