Correlation Between IShares Core and Elspec

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both IShares Core and Elspec 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 Elspec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares Core SPTSX and Elspec, you can compare the effects of market volatilities on IShares Core and Elspec 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 Elspec. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Elspec.

Diversification Opportunities for IShares Core and Elspec

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between IShares and Elspec is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IShares Core SPTSX and Elspec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elspec 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 SPTSX are associated (or correlated) with Elspec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elspec has no effect on the direction of IShares Core i.e., IShares Core and Elspec go up and down completely randomly.

Pair Corralation between IShares Core and Elspec

Assuming the 90 days trading horizon IShares Core is expected to generate 8.63 times less return on investment than Elspec. But when comparing it to its historical volatility, IShares Core SPTSX is 3.69 times less risky than Elspec. It trades about 0.02 of its potential returns per unit of risk. Elspec is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  35,400  in Elspec on December 30, 2023 and sell it today you would earn a total of  21,600  from holding Elspec or generate 61.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy78.95%
ValuesDaily Returns

IShares Core SPTSX  vs.  Elspec

 Performance 
       Timeline  
IShares Core SPTSX 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Core SPTSX are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Elspec 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Elspec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Elspec is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

IShares Core and Elspec Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Core and Elspec

The main advantage of trading using opposite IShares Core and Elspec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Elspec 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 Elspec will offset losses from the drop in Elspec's long position.
The idea behind IShares Core SPTSX and Elspec 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Fundamental Analysis
View fundamental data based on most recent published financial statements
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk