Correlation Between IShares Silver and Total Stock

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

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

Diversification Opportunities for IShares Silver and Total Stock

-0.74
  Correlation Coefficient
IShares Silver Trust
Total Stock Market

Pay attention - limited upside

The 3 months correlation between IShares and Total is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding IShares Silver Trust and Total Stock Market in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Total Stock Market 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 Total Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Stock Market has no effect on the direction of IShares Silver i.e., IShares Silver and Total Stock go up and down completely randomly.

Pair Corralation between IShares Silver and Total Stock

Considering the 90-day investment horizon IShares Silver Trust is expected to under-perform the Total Stock. In addition to that, IShares Silver is 3.0 times more volatile than Total Stock Market. It trades about -0.13 of its total potential returns per unit of risk. Total Stock Market is currently generating about 0.18 per unit of volatility. If you would invest  22,625  in Total Stock Market on June 19, 2021 and sell it today you would earn a total of  464.00  from holding Total Stock Market or generate 2.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

IShares Silver Trust  vs.  Total Stock Market

 Performance (%) 
      Timeline 
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 conflicting performance in the last few months, the Etf's essential indicators remain fairly stable which may send shares a bit higher in October 2021. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

IShares Price Channel

Total Stock Market 
 Total Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Total Stock Market are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Total Stock is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Total Price Channel

IShares Silver and Total Stock Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with IShares Silver and Total Stock

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

Total Stock Market

Pair trading matchups for Total Stock

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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