Correlation Between IShares Trust and 1StdibsCom

Can any of the company-specific risk be diversified away by investing in both IShares Trust and 1StdibsCom 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 Trust and 1StdibsCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Trust and 1StdibsCom, you can compare the effects of market volatilities on IShares Trust and 1StdibsCom 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 Trust with a short position of 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and 1StdibsCom.

Diversification Opportunities for IShares Trust and 1StdibsCom

0.72

Correlation Coefficient

IShares Trust  1StdibsCom

Poor diversification

The 3 months correlation between IShares and 1StdibsCom is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom and IShares Trust 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 Trust are associated (or correlated) with 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of IShares Trust i.e., IShares Trust and 1StdibsCom go up and down completely randomly.

Pair Corralation between IShares Trust and 1StdibsCom

Given the investment horizon of 90 days IShares Trust is expected to generate 4.9 times less return on investment than 1StdibsCom. But when comparing it to its historical volatility, iShares Trust is 19.15 times less risky than 1StdibsCom. It trades about 0.3 of its potential returns per unit of risk. 1StdibsCom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  247.00  in 1StdibsCom on April 30, 2025 and sell it today you would earn a total of  29.00  from holding 1StdibsCom or generate 11.74% return on investment over 90 days.

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

iShares Trust   vs.  1StdibsCom

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

1StdibsCom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 1StdibsCom are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, 1StdibsCom unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Trust and 1StdibsCom

The main advantage of trading using opposite IShares Trust and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.

The idea behind iShares Trust and 1StdibsCom 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 Stocks Directory module to find actively traded stocks across global markets.