Correlation Between Value8 NV and IShares SP

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

By analyzing existing cross correlation between Value8 NV and iShares SP 500, you can compare the effects of market volatilities on Value8 NV and IShares SP 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 Value8 NV with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value8 NV and IShares SP.

Diversification Opportunities for Value8 NV and IShares SP

0.76

Correlation Coefficient

Value8 NV  IShares SP

Poor diversification

The 3 months correlation between Value8 and IShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Value8 NV and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 and Value8 NV 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 Value8 NV are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of Value8 NV i.e., Value8 NV and IShares SP go up and down completely randomly.

Pair Corralation between Value8 NV and IShares SP

Assuming the 90 days trading horizon Value8 NV is expected to generate 1.28 times less return on investment than IShares SP. In addition to that, Value8 NV is 2.35 times more volatile than iShares SP 500. It trades about 0.12 of its total potential returns per unit of risk. iShares SP 500 is currently generating about 0.35 per unit of volatility. If you would invest  591.00  in iShares SP 500 on April 20, 2025 and sell it today you would earn a total of  118.00  from holding iShares SP 500 or generate 19.97% return on investment over 90 days.

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

Value8 NV  vs.  iShares SP 500

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.

iShares SP 500

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP 500 are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, IShares SP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Value8 NV and IShares SP

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

The idea behind Value8 NV and iShares SP 500 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.