Correlation Between EKAR and IShares Semiconductor
Can any of the company-specific risk be diversified away by investing in both EKAR and IShares Semiconductor 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 EKAR and IShares Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EKAR and iShares Semiconductor ETF, you can compare the effects of market volatilities on EKAR and IShares Semiconductor 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 EKAR with a short position of IShares Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of EKAR and IShares Semiconductor.
Diversification Opportunities for EKAR and IShares Semiconductor
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between EKAR and IShares is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding EKAR and iShares Semiconductor ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Semiconductor ETF and EKAR 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 EKAR are associated (or correlated) with IShares Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Semiconductor ETF has no effect on the direction of EKAR i.e., EKAR and IShares Semiconductor go up and down completely randomly.
Pair Corralation between EKAR and IShares Semiconductor
If you would invest (100.00) in EKAR on January 20, 2024 and sell it today you would earn a total of 100.00 from holding EKAR or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
EKAR vs. iShares Semiconductor ETF
Performance |
| Timeline |
| EKAR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares Semiconductor ETF |
EKAR and IShares Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EKAR and IShares Semiconductor
The main advantage of trading using opposite EKAR and IShares Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EKAR position performs unexpectedly, IShares Semiconductor 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 Semiconductor will offset losses from the drop in IShares Semiconductor's long position.The idea behind EKAR and iShares Semiconductor ETF 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.| IShares Semiconductor vs. ARK Genomic Revolution | IShares Semiconductor vs. ARK Innovation ETF | IShares Semiconductor vs. ARK Space Exploration |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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