Correlation Between IShares Silver and Aeva Technologies

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

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

Diversification Opportunities for IShares Silver and Aeva Technologies

-0.68

Correlation Coefficient

IShares Silver  Aeva Technologies

Excellent diversification

The 3 months correlation between IShares and Aeva is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and Aeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies 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 Aeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeva Technologies has no effect on the direction of IShares Silver i.e., IShares Silver and Aeva Technologies go up and down completely randomly.

Pair Corralation between IShares Silver and Aeva Technologies

Considering the 90-day investment horizon iShares Silver Trust is expected to generate 0.35 times more return on investment than Aeva Technologies. However, iShares Silver Trust is 2.85 times less risky than Aeva Technologies. It trades about 0.24 of its potential returns per unit of risk. Aeva Technologies is currently generating about -0.08 per unit of risk. If you would invest  2,062  in iShares Silver Trust on February 26, 2024 and sell it today you would earn a total of  712.00  from holding iShares Silver Trust or generate 34.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

iShares Silver Trust  vs.  Aeva Technologies

iShares Silver Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Silver Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, IShares Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Aeva Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with IShares Silver and Aeva Technologies

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

The idea behind iShares Silver Trust and Aeva Technologies 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.