Correlation Between IShares Core and Bunge

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both IShares Core and Bunge 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 Core and Bunge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares Core SP and Bunge Limited, you can compare the effects of market volatilities on IShares Core and Bunge 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 Core with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Bunge.

Diversification Opportunities for IShares Core and Bunge

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between IShares and Bunge is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IShares Core SP and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and IShares Core 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 Core SP are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of IShares Core i.e., IShares Core and Bunge go up and down completely randomly.

Pair Corralation between IShares Core and Bunge

Considering the 90-day investment horizon IShares Core is expected to generate 1.51 times less return on investment than Bunge. But when comparing it to its historical volatility, IShares Core SP is 1.81 times less risky than Bunge. It trades about 0.39 of its potential returns per unit of risk. Bunge Limited is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  9,312  in Bunge Limited on December 29, 2023 and sell it today you would earn a total of  940.00  from holding Bunge Limited or generate 10.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

IShares Core SP  vs.  Bunge Limited

 Performance 
       Timeline  
IShares Core SP 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Core SP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Bunge Limited 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Bunge Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Bunge is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

IShares Core and Bunge Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Core and Bunge

The main advantage of trading using opposite IShares Core and Bunge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Bunge 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 Bunge will offset losses from the drop in Bunge's long position.
The idea behind IShares Core SP and Bunge Limited 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 Transaction History module to view history of all your transactions and understand their impact on performance.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes