Correlation Between IShares Global and Middlefield Global

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

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

Diversification Opportunities for IShares Global and Middlefield Global

0.94

Correlation Coefficient

IShares Global  Middlefield Global

Almost no diversification

The 3 months correlation between IShares and Middlefield is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Monthly and Middlefield Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middlefield Global and IShares Global 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 Global Monthly are associated (or correlated) with Middlefield Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middlefield Global has no effect on the direction of IShares Global i.e., IShares Global and Middlefield Global go up and down completely randomly.

Pair Corralation between IShares Global and Middlefield Global

Assuming the 90 days trading horizon IShares Global is expected to generate 1.07 times less return on investment than Middlefield Global. But when comparing it to its historical volatility, iShares Global Monthly is 1.06 times less risky than Middlefield Global. It trades about 0.22 of its potential returns per unit of risk. Middlefield Global Dividend is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,627  in Middlefield Global Dividend on April 24, 2025 and sell it today you would earn a total of  154.00  from holding Middlefield Global Dividend or generate 9.47% return on investment over 90 days.

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

iShares Global Monthly  vs.  Middlefield Global Dividend

iShares Global Monthly

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Monthly are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, IShares Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Middlefield Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Middlefield Global Dividend are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Middlefield Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IShares Global and Middlefield Global

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

The idea behind iShares Global Monthly and Middlefield Global Dividend 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.