Correlation Between Barclays Capital and IShares Silver

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

Diversification Opportunities for Barclays Capital and IShares Silver

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Barclays and IShares is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and IShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Silver Trust and Barclays Capital 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 Barclays Capital are associated (or correlated) with IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Silver Trust has no effect on the direction of Barclays Capital i.e., Barclays Capital and IShares Silver go up and down completely randomly.

Pair Corralation between Barclays Capital and IShares Silver

Considering the 90-day investment horizon Barclays Capital is expected to generate 19.0 times less return on investment than IShares Silver. But when comparing it to its historical volatility, Barclays Capital is 1.18 times less risky than IShares Silver. It trades about 0.0 of its potential returns per unit of risk. IShares Silver Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,315  in IShares Silver Trust on December 30, 2023 and sell it today you would lose (40.00) from holding IShares Silver Trust or give up 1.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy56.48%
ValuesDaily Returns

Barclays Capital  vs.  IShares Silver Trust

 Performance 
       Timeline  
Barclays Capital 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, Barclays Capital is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
IShares Silver Trust 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Silver Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, IShares Silver is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Barclays Capital and IShares Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barclays Capital and IShares Silver

The main advantage of trading using opposite Barclays Capital and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, IShares Silver 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 Silver will offset losses from the drop in IShares Silver's long position.
The idea behind Barclays Capital and IShares Silver Trust 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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