Correlation Between ETFMG Prime and IShares Exponential
Can any of the company-specific risk be diversified away by investing in both ETFMG Prime 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 ETFMG Prime and IShares Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFMG Prime Mobile and iShares Exponential Technologies, you can compare the effects of market volatilities on ETFMG Prime 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 ETFMG Prime with a short position of IShares Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFMG Prime and IShares Exponential.
Diversification Opportunities for ETFMG Prime and IShares Exponential
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ETFMG and IShares is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ETFMG Prime Mobile and iShares Exponential Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Exponential and ETFMG Prime 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 ETFMG Prime Mobile 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 ETFMG Prime i.e., ETFMG Prime and IShares Exponential go up and down completely randomly.
Pair Corralation between ETFMG Prime and IShares Exponential
Given the investment horizon of 90 days ETFMG Prime Mobile is expected to generate 1.1 times more return on investment than IShares Exponential. However, ETFMG Prime is 1.1 times more volatile than iShares Exponential Technologies. It trades about -0.17 of its potential returns per unit of risk. iShares Exponential Technologies is currently generating about -0.22 per unit of risk. If you would invest 5,208 in ETFMG Prime Mobile on January 25, 2024 and sell it today you would lose (245.00) from holding ETFMG Prime Mobile or give up 4.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFMG Prime Mobile vs. iShares Exponential Technologi
Performance |
| Timeline |
| ETFMG Prime Mobile |
| iShares Exponential |
ETFMG Prime and IShares Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFMG Prime and IShares Exponential
The main advantage of trading using opposite ETFMG Prime and IShares Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFMG Prime 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.| ETFMG Prime vs. SPDR Kensho New | ETFMG Prime vs. iShares Robotics and | ETFMG Prime vs. Global X FinTech | ETFMG Prime 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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