Correlation Between Evolve FANGMA and IShares Dividend

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

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

Diversification Opportunities for Evolve FANGMA and IShares Dividend

0.73

Correlation Coefficient

Evolve FANGMA  IShares Dividend

Poor diversification

The 3 months correlation between Evolve and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Evolve FANGMA Index and iShares Dividend Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend Growers and Evolve FANGMA 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 Evolve FANGMA Index are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend Growers has no effect on the direction of Evolve FANGMA i.e., Evolve FANGMA and IShares Dividend go up and down completely randomly.

Pair Corralation between Evolve FANGMA and IShares Dividend

Assuming the 90 days trading horizon Evolve FANGMA Index is expected to generate 1.33 times more return on investment than IShares Dividend. However, Evolve FANGMA is 1.33 times more volatile than iShares Dividend Growers. It trades about 0.36 of its potential returns per unit of risk. iShares Dividend Growers is currently generating about 0.17 per unit of risk. If you would invest  1,483  in Evolve FANGMA Index on April 20, 2025 and sell it today you would earn a total of  430.00  from holding Evolve FANGMA Index or generate 29.0% return on investment over 90 days.

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

Evolve FANGMA Index  vs.  iShares Dividend Growers

Evolve FANGMA Index

Risk-Adjusted Performance

Strong

Over the last 90 days Evolve FANGMA Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Evolve FANGMA displayed solid returns over the last few months and may actually be approaching a breakup point.

iShares Dividend Growers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend Growers are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, IShares Dividend may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Evolve FANGMA and IShares Dividend

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

The idea behind Evolve FANGMA Index and iShares Dividend Growers 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.