Correlation Between US Global and IShares International
Can any of the company-specific risk be diversified away by investing in both US Global and IShares International 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 US Global and IShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Sea and iShares International Select, you can compare the effects of market volatilities on US Global and IShares International 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 US Global with a short position of IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and IShares International.
Diversification Opportunities for US Global and IShares International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEA and IShares is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding US Global Sea and iShares International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International and US Global 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 US Global Sea are associated (or correlated) with IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of US Global i.e., US Global and IShares International go up and down completely randomly.
Pair Corralation between US Global and IShares International
Considering the 90-day investment horizon US Global is expected to generate 2.89 times less return on investment than IShares International. In addition to that, US Global is 1.42 times more volatile than iShares International Select. It trades about 0.0 of its total potential returns per unit of risk. iShares International Select is currently generating about 0.02 per unit of volatility. If you would invest 2,627 in iShares International Select on January 25, 2024 and sell it today you would earn a total of 178.00 from holding iShares International Select or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
US Global Sea vs. iShares International Select
Performance |
| Timeline |
| US Global Sea |
| iShares International |
US Global and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and IShares International
The main advantage of trading using opposite US Global and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, IShares International 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 International will offset losses from the drop in IShares International's long position.| 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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