Correlation Between IShares Silver and New Economy
Can any of the company-specific risk be diversified away by investing in both IShares Silver and New Economy 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 Silver and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Silver Trust and New Economy Fund, you can compare the effects of market volatilities on IShares Silver and New Economy 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 Silver with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and New Economy.
Diversification Opportunities for IShares Silver and New Economy
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and IShares Silver 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 Silver Trust are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of IShares Silver i.e., IShares Silver and New Economy go up and down completely randomly.
Pair Corralation between IShares Silver and New Economy
Considering the 90-day investment horizon iShares Silver Trust is expected to generate 2.15 times more return on investment than New Economy. However, IShares Silver is 2.15 times more volatile than New Economy Fund. It trades about 0.24 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.08 per unit of risk. If you would invest 2,062 in iShares Silver Trust on February 26, 2024 and sell it today you would earn a total of 712.00 from holding iShares Silver Trust or generate 34.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.48% |
Values | Daily Returns |
iShares Silver Trust vs. New Economy Fund
Performance |
Timeline |
iShares Silver Trust |
New Economy Fund |
IShares Silver and New Economy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Silver and New Economy
The main advantage of trading using opposite IShares Silver and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.IShares Silver vs. Knife River | IShares Silver vs. Atomic Minerals | IShares Silver vs. Medical Equipment And | IShares Silver vs. SEI Investments |
New Economy vs. Income Fund Of | New Economy vs. New World Fund | New Economy vs. American Mutual Fund | New Economy vs. American Mutual Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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