Correlation Between Verizon Communications and IShares Core

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

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

Diversification Opportunities for Verizon Communications and IShares Core

-0.28

Correlation Coefficient

Verizon Communications  IShares Core

Very good diversification

The 3 months correlation between Verizon and IShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and Verizon Communications 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 Verizon Communications are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Verizon Communications i.e., Verizon Communications and IShares Core go up and down completely randomly.

Pair Corralation between Verizon Communications and IShares Core

Allowing for the 90-day total investment horizon Verizon Communications is expected to under-perform the IShares Core. In addition to that, Verizon Communications is 1.07 times more volatile than iShares Core SP. It trades about 0.0 of its total potential returns per unit of risk. iShares Core SP is currently generating about 0.13 per unit of volatility. If you would invest  5,806  in iShares Core SP on May 7, 2025 and sell it today you would earn a total of  480.00  from holding iShares Core SP or generate 8.27% return on investment over 90 days.

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

Verizon Communications  vs.  iShares Core SP

Verizon Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Verizon Communications is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

iShares Core SP

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward-looking indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Verizon Communications and IShares Core

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

The idea behind Verizon Communications and iShares Core SP 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.