Correlation Between Robinson Opportunistic and IShares IBonds

Can any of the company-specific risk be diversified away by investing in both Robinson Opportunistic and IShares IBonds 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 Robinson Opportunistic and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Robinson Opportunistic Income and iShares iBonds 2027, you can compare the effects of market volatilities on Robinson Opportunistic and IShares IBonds 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 Robinson Opportunistic with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robinson Opportunistic and IShares IBonds.

Diversification Opportunities for Robinson Opportunistic and IShares IBonds

0.73

Correlation Coefficient

Robinson Opportunistic  IShares IBonds

Poor diversification

The 3 months correlation between Robinson and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Robinson Opportunistic Income and iShares iBonds 2027 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds 2027 and Robinson Opportunistic 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 Robinson Opportunistic Income are associated (or correlated) with IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds 2027 has no effect on the direction of Robinson Opportunistic i.e., Robinson Opportunistic and IShares IBonds go up and down completely randomly.

Pair Corralation between Robinson Opportunistic and IShares IBonds

Assuming the 90 days horizon Robinson Opportunistic is expected to generate 1.0 times less return on investment than IShares IBonds. But when comparing it to its historical volatility, Robinson Opportunistic Income is 1.67 times less risky than IShares IBonds. It trades about 0.07 of its potential returns per unit of risk. iShares iBonds 2027 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,990  in iShares iBonds 2027 on January 25, 2024 and sell it today you would earn a total of  211.00  from holding iShares iBonds 2027 or generate 10.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Robinson Opportunistic Income  vs.  iShares iBonds 2027

Robinson Opportunistic

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robinson Opportunistic Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Robinson Opportunistic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares iBonds 2027

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBonds 2027 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, IShares IBonds is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Robinson Opportunistic and IShares IBonds

The main advantage of trading using opposite Robinson Opportunistic and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robinson Opportunistic position performs unexpectedly, IShares IBonds 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 IBonds will offset losses from the drop in IShares IBonds' long position.

The idea behind Robinson Opportunistic Income and iShares iBonds 2027 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.