Correlation Between IShares Global and IShares Exponential
Can any of the company-specific risk be diversified away by investing in both IShares Global and IShares Exponential 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 Global and IShares Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Clean and iShares Exponential Technologies, you can compare the effects of market volatilities on IShares Global and IShares Exponential 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 Global with a short position of IShares Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and IShares Exponential.
Diversification Opportunities for IShares Global and IShares Exponential
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Clean and iShares Exponential Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Exponential and IShares 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 iShares Global Clean are associated (or correlated) with IShares Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Exponential has no effect on the direction of IShares Global i.e., IShares Global and IShares Exponential go up and down completely randomly.
Pair Corralation between IShares Global and IShares Exponential
Given the investment horizon of 90 days iShares Global Clean is expected to under-perform the IShares Exponential. In addition to that, IShares Global is 1.26 times more volatile than iShares Exponential Technologies. It trades about -0.03 of its total potential returns per unit of risk. iShares Exponential Technologies is currently generating about 0.02 per unit of volatility. If you would invest 5,016 in iShares Exponential Technologies on January 26, 2024 and sell it today you would earn a total of 588.00 from holding iShares Exponential Technologies or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Global Clean vs. iShares Exponential Technologi
Performance |
| Timeline |
| iShares Global Clean |
| iShares Exponential |
IShares Global and IShares Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and IShares Exponential
The main advantage of trading using opposite IShares Global and IShares Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, IShares Exponential 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 Exponential will offset losses from the drop in IShares Exponential's long position.| IShares Global vs. SPDR Kensho New | IShares Global vs. iShares Robotics and | IShares Global vs. Global X FinTech | IShares Global vs. Invesco SP SmallCap |
| IShares Exponential vs. SPDR Kensho New | IShares Exponential vs. iShares Robotics and | IShares Exponential vs. Global X FinTech | IShares Exponential vs. Invesco SP SmallCap |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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