Correlation Between IShares Silver and Midcap ETF

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

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

Diversification Opportunities for IShares Silver and Midcap ETF

  Correlation Coefficient
IShares Silver Trust
Midcap ETF Vanguard

Modest diversification

The 3 months correlation between IShares and Midcap is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding IShares Silver Trust and Midcap ETF Vanguard in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Midcap ETF Vanguard 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 Midcap ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap ETF Vanguard has no effect on the direction of IShares Silver i.e., IShares Silver and Midcap ETF go up and down completely randomly.

Pair Corralation between IShares Silver and Midcap ETF

Considering the 90-day investment horizon IShares Silver Trust is expected to generate 1.59 times more return on investment than Midcap ETF. However, IShares Silver is 1.59 times more volatile than Midcap ETF Vanguard. It trades about 0.04 of its potential returns per unit of risk. Midcap ETF Vanguard is currently generating about 0.05 per unit of risk. If you would invest  1,647  in IShares Silver Trust on July 28, 2021 and sell it today you would earn a total of  627.00  from holding IShares Silver Trust or generate 38.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

IShares Silver Trust  vs.  Midcap ETF Vanguard

 Performance (%) 
IShares Silver Trust 
 IShares Performance
0 of 100
Over the last 90 days IShares Silver Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, IShares Silver is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

IShares Price Channel

Midcap ETF Vanguard 
 Midcap Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Midcap ETF Vanguard are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Midcap ETF is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Midcap Price Channel

IShares Silver and Midcap ETF Volatility Contrast

 Predicted Return Density 

Pair Trading with IShares Silver and Midcap ETF

The main advantage of trading using opposite IShares Silver and Midcap ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver position performs unexpectedly, Midcap ETF 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 Midcap ETF will offset losses from the drop in Midcap ETF's long position.
The idea behind IShares Silver Trust and Midcap ETF Vanguard 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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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