Correlation Between IShares Core and Value8 NV

Can any of the company-specific risk be diversified away by investing in both IShares Core and Value8 NV 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 Value8 NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core SP and Value8 NV, you can compare the effects of market volatilities on IShares Core and Value8 NV 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 Value8 NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Value8 NV.

Diversification Opportunities for IShares Core and Value8 NV

0.61

Correlation Coefficient

IShares Core  Value8 NV

Poor diversification

The 3 months correlation between IShares and Value8 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Value8 NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value8 NV 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 SP are associated (or correlated) with Value8 NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value8 NV has no effect on the direction of IShares Core i.e., IShares Core and Value8 NV go up and down completely randomly.

Pair Corralation between IShares Core and Value8 NV

Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.51 times more return on investment than Value8 NV. However, iShares Core SP is 1.95 times less risky than Value8 NV. It trades about 0.26 of its potential returns per unit of risk. Value8 NV is currently generating about 0.12 per unit of risk. If you would invest  48,825  in iShares Core SP on April 22, 2025 and sell it today you would earn a total of  8,821  from holding iShares Core SP or generate 18.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

iShares Core SP  vs.  Value8 NV

iShares Core SP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Core unveiled solid returns over the last few months and may actually be approaching a breakup point.

Value8 NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Value8 NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Value8 NV sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Core and Value8 NV

The main advantage of trading using opposite IShares Core and Value8 NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Value8 NV 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 Value8 NV will offset losses from the drop in Value8 NV's long position.

The idea behind iShares Core SP and Value8 NV 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 Anywhere module to track or share privately all of your investments from the convenience of any device.