Correlation Between IShares Trust and RATIONAL UNADR

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

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

Diversification Opportunities for IShares Trust and RATIONAL UNADR

-0.66

Correlation Coefficient

IShares Trust  RATIONAL UNADR

Excellent diversification

The 3 months correlation between IShares and RATIONAL is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and RATIONAL UNADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATIONAL UNADR 1 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 RATIONAL UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATIONAL UNADR 1 has no effect on the direction of IShares Trust i.e., IShares Trust and RATIONAL UNADR go up and down completely randomly.

Pair Corralation between IShares Trust and RATIONAL UNADR

Given the investment horizon of 90 days iShares Trust is expected to generate 0.08 times more return on investment than RATIONAL UNADR. However, iShares Trust is 11.85 times less risky than RATIONAL UNADR. It trades about 0.31 of its potential returns per unit of risk. RATIONAL UNADR 1 is currently generating about -0.08 per unit of risk. If you would invest  2,475  in iShares Trust on May 5, 2025 and sell it today you would earn a total of  75.00  from holding iShares Trust or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

iShares Trust   vs.  RATIONAL UNADR 1

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 24 (%) 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.

RATIONAL UNADR 1

Risk-Adjusted Performance

Very Weak

Over the last 90 days RATIONAL UNADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with IShares Trust and RATIONAL UNADR

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

The idea behind iShares Trust and RATIONAL UNADR 1 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.