Correlation Between FT Cboe and IShares Basic

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

By analyzing existing cross correlation between FT Cboe Vest and iShares Basic Materials, you can compare the effects of market volatilities on FT Cboe and IShares Basic 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 FT Cboe with a short position of IShares Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and IShares Basic.

Diversification Opportunities for FT Cboe and IShares Basic

0.95

Correlation Coefficient

FT Cboe  IShares Basic

Almost no diversification

The 3 months correlation between BUFD and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and iShares Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Basic Materials and FT Cboe 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 FT Cboe Vest are associated (or correlated) with IShares Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Basic Materials has no effect on the direction of FT Cboe i.e., FT Cboe and IShares Basic go up and down completely randomly.

Pair Corralation between FT Cboe and IShares Basic

Given the investment horizon of 90 days FT Cboe Vest is expected to generate 0.47 times more return on investment than IShares Basic. However, FT Cboe Vest is 2.13 times less risky than IShares Basic. It trades about 0.24 of its potential returns per unit of risk. iShares Basic Materials is currently generating about 0.11 per unit of risk. If you would invest  2,502  in FT Cboe Vest on May 4, 2025 and sell it today you would earn a total of  168.00  from holding FT Cboe Vest or generate 6.71% return on investment over 90 days.

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

FT Cboe Vest  vs.  iShares Basic Materials

FT Cboe Vest

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FT Cboe may actually be approaching a critical reversion point that can send shares even higher in September 2025.

iShares Basic Materials

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Basic Materials are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Basic is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FT Cboe and IShares Basic

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

The idea behind FT Cboe Vest and iShares Basic Materials 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.