Correlation Between IShares Core and Shagrir Group

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Can any of the company-specific risk be diversified away by investing in both IShares Core and Shagrir Group 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 Shagrir Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares Core SP and Shagrir Group Vehicle, you can compare the effects of market volatilities on IShares Core and Shagrir Group 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 Shagrir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Shagrir Group.

Diversification Opportunities for IShares Core and Shagrir Group

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between IShares and Shagrir is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding IShares Core SP and Shagrir Group Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shagrir Group Vehicle 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 SP are associated (or correlated) with Shagrir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shagrir Group Vehicle has no effect on the direction of IShares Core i.e., IShares Core and Shagrir Group go up and down completely randomly.

Pair Corralation between IShares Core and Shagrir Group

Considering the 90-day investment horizon IShares Core SP is expected to generate 0.52 times more return on investment than Shagrir Group. However, IShares Core SP is 1.93 times less risky than Shagrir Group. It trades about 0.03 of its potential returns per unit of risk. Shagrir Group Vehicle is currently generating about -0.06 per unit of risk. If you would invest  5,054  in IShares Core SP on December 29, 2023 and sell it today you would earn a total of  1,004  from holding IShares Core SP or generate 19.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy78.74%
ValuesDaily Returns

IShares Core SP  vs.  Shagrir Group Vehicle

 Performance 
       Timeline  
IShares Core SP 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Core SP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Shagrir Group Vehicle 

Risk-Adjusted Performance

24 of 100

 
Low
 
High
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shagrir Group Vehicle are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shagrir Group sustained solid returns over the last few months and may actually be approaching a breakup point.

IShares Core and Shagrir Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Core and Shagrir Group

The main advantage of trading using opposite IShares Core and Shagrir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Shagrir Group 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 Shagrir Group will offset losses from the drop in Shagrir Group's long position.
The idea behind IShares Core SP and Shagrir Group Vehicle 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.
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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