Correlation Between ETF Opportunities and IShares Core

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

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

Diversification Opportunities for ETF Opportunities and IShares Core

0.86

Correlation Coefficient

ETF Opportunities  IShares Core

Very poor diversification

The 3 months correlation between ETF and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ETF Opportunities Trust and iShares Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Dividend and ETF Opportunities 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 ETF Opportunities Trust are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Dividend has no effect on the direction of ETF Opportunities i.e., ETF Opportunities and IShares Core go up and down completely randomly.

Pair Corralation between ETF Opportunities and IShares Core

Given the investment horizon of 90 days ETF Opportunities is expected to generate 1.28 times less return on investment than IShares Core. In addition to that, ETF Opportunities is 1.42 times more volatile than iShares Core Dividend. It trades about 0.29 of its total potential returns per unit of risk. iShares Core Dividend is currently generating about 0.53 per unit of volatility. If you would invest  5,523  in iShares Core Dividend on February 16, 2024 and sell it today you would earn a total of  320.00  from holding iShares Core Dividend or generate 5.79% return on investment over 90 days.

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

ETF Opportunities Trust  vs.  iShares Core Dividend

ETF Opportunities Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Opportunities Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ETF Opportunities is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares Core Dividend

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Dividend are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ETF Opportunities and IShares Core

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

The idea behind ETF Opportunities Trust and iShares Core Dividend 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.