Correlation Between IShares Global and Distillate Fundamental

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

By analyzing existing cross correlation between iShares Global Energy and Distillate Fundamental Stability, you can compare the effects of market volatilities on IShares Global and Distillate Fundamental 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 Distillate Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Distillate Fundamental.

Diversification Opportunities for IShares Global and Distillate Fundamental

-0.1

Correlation Coefficient

IShares Global  Distillate Fundamental

Good diversification

The 3 months correlation between IShares and Distillate is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Energy and Distillate Fundamental Stabili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distillate Fundamental 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 Energy are associated (or correlated) with Distillate Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distillate Fundamental has no effect on the direction of IShares Global i.e., IShares Global and Distillate Fundamental go up and down completely randomly.

Pair Corralation between IShares Global and Distillate Fundamental

Considering the 90-day investment horizon iShares Global Energy is expected to generate 1.3 times more return on investment than Distillate Fundamental. However, IShares Global is 1.3 times more volatile than Distillate Fundamental Stability. It trades about 0.05 of its potential returns per unit of risk. Distillate Fundamental Stability is currently generating about 0.01 per unit of risk. If you would invest  4,108  in iShares Global Energy on August 26, 2025 and sell it today you would earn a total of  118.00  from holding iShares Global Energy or generate 2.87% return on investment over 90 days.

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

iShares Global Energy  vs.  Distillate Fundamental Stabili

iShares Global Energy

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares Global is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Distillate Fundamental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Distillate Fundamental Stability are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Distillate Fundamental is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares Global and Distillate Fundamental

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

The idea behind iShares Global Energy and Distillate Fundamental Stability 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.