Correlation Between Russell Investments and IShares Global

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

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

Diversification Opportunities for Russell Investments and IShares Global

0.87

Correlation Coefficient

Russell Investments  IShares Global

Very poor diversification

The 3 months correlation between Russell and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Russell Investments Global and iShares Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Infra and Russell Investments 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 Russell Investments Global are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Infra has no effect on the direction of Russell Investments i.e., Russell Investments and IShares Global go up and down completely randomly.

Pair Corralation between Russell Investments and IShares Global

Assuming the 90 days trading horizon Russell Investments is expected to generate 3.45 times less return on investment than IShares Global. But when comparing it to its historical volatility, Russell Investments Global is 1.08 times less risky than IShares Global. It trades about 0.1 of its potential returns per unit of risk. iShares Global Infrastructure is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  4,669  in iShares Global Infrastructure on April 25, 2025 and sell it today you would earn a total of  676.00  from holding iShares Global Infrastructure or generate 14.48% return on investment over 90 days.

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

Russell Investments Global  vs.  iShares Global Infrastructure

Russell Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Russell Investments Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Russell Investments is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

iShares Global Infra

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Infrastructure are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IShares Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Russell Investments and IShares Global

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

The idea behind Russell Investments Global and iShares Global Infrastructure 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.