Correlation Between IShares Core and Bunge
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 REIT 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
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Bunge is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core REIT 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 REIT 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
Given the investment horizon of 90 days IShares Core is expected to generate 2.59 times less return on investment than Bunge. But when comparing it to its historical volatility, iShares Core REIT is 1.17 times less risky than Bunge. It trades about 0.03 of its potential returns per unit of risk. Bunge Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,870 in Bunge Limited on January 19, 2024 and sell it today you would earn a total of 1,672 from holding Bunge Limited or generate 18.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
iShares Core REIT vs. Bunge Limited
Performance |
| Timeline |
| iShares Core REIT |
| Bunge Limited |
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.| IShares Core vs. Howard Hughes | IShares Core vs. Site Centers Corp | IShares Core vs. iShares Real Estate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |