Correlation Between IShares Silver and DOW

By analyzing existing cross correlation between IShares Silver Trust and DOW, you can compare the effects of market volatilities on IShares Silver and DOW 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 Silver with a short position of DOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and DOW.

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

Diversification Opportunities for IShares Silver and DOW

  Correlation Coefficient
IShares Silver Trust

Very poor diversification

The 3 months correlation between IShares and DOW is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding IShares Silver Trust and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and IShares Silver 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 Silver Trust are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of IShares Silver i.e. IShares Silver and DOW go up and down completely randomly.

Pair Corralation between IShares Silver and DOW

Considering the 30-days investment horizon, IShares Silver Trust is expected to generate 0.97 times more return on investment than DOW. However, IShares Silver Trust is 1.03 times less risky than DOW. It trades about 0.18 of its potential returns per unit of risk. DOW is currently generating about 0.09 per unit of risk. If you would invest  1,440  in IShares Silver Trust on June 10, 2020 and sell it today you would earn a total of  298.00  from holding IShares Silver Trust or generate 20.69% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

IShares Silver Trust  vs.  DOW

 Performance (%) 
 Predicted Return Density 
Check out your portfolio center. Please also try Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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