Correlation Between IShares Core and US Global
Can any of the company-specific risk be diversified away by investing in both IShares Core and US Global 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 US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and US Global Sea, you can compare the effects of market volatilities on IShares Core and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and US Global.
Diversification Opportunities for IShares Core and US Global
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SEA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea 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 MSCI are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of IShares Core i.e., IShares Core and US Global go up and down completely randomly.
Pair Corralation between IShares Core and US Global
Given the investment horizon of 90 days IShares Core is expected to generate 1.72 times less return on investment than US Global. But when comparing it to its historical volatility, iShares Core MSCI is 1.64 times less risky than US Global. It trades about 0.05 of its potential returns per unit of risk. US Global Sea is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,285 in US Global Sea on January 24, 2024 and sell it today you would earn a total of 235.00 from holding US Global Sea or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. US Global Sea
Performance |
| Timeline |
| iShares Core MSCI |
| US Global Sea |
IShares Core and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and US Global
The main advantage of trading using opposite IShares Core and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| IShares Core vs. iShares ESG Aware | IShares Core vs. iShares ESG Aware | IShares Core vs. iShares ESG Aware | IShares Core vs. iShares MSCI USA |
| US Global vs. Materials Select Sector | US Global vs. Consumer Discretionary Select | US Global vs. Consumer Staples Select | US Global vs. Health Care Select |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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