Correlation Between DGAZ and IShares Core

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Can any of the company-specific risk be diversified away by investing in both DGAZ and IShares Core 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 DGAZ and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DGAZ and IShares Core SP, you can compare the effects of market volatilities on DGAZ and IShares Core 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 DGAZ with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of DGAZ and IShares Core.

Diversification Opportunities for DGAZ and IShares Core

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DGAZ and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DGAZ and IShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Core SP and DGAZ 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 DGAZ are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Core SP has no effect on the direction of DGAZ i.e., DGAZ and IShares Core go up and down completely randomly.

Pair Corralation between DGAZ and IShares Core

If you would invest  42,798  in IShares Core SP on December 30, 2023 and sell it today you would earn a total of  9,775  from holding IShares Core SP or generate 22.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

DGAZ  vs.  IShares Core SP

 Performance 
       Timeline  
DGAZ 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days DGAZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, DGAZ is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
IShares Core SP 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Core SP are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in April 2024.

DGAZ and IShares Core Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DGAZ and IShares Core

The main advantage of trading using opposite DGAZ and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DGAZ position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.
The idea behind DGAZ and IShares Core SP 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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