Correlation Between IShares Core and Purpose Total

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

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

Diversification Opportunities for IShares Core and Purpose Total

0.92

Correlation Coefficient

IShares Core  Purpose Total

Almost no diversification

The 3 months correlation between IShares and Purpose is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Purpose Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Total Return and IShares Core 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 Core MSCI are associated (or correlated) with Purpose Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Total Return has no effect on the direction of IShares Core i.e., IShares Core and Purpose Total go up and down completely randomly.

Pair Corralation between IShares Core and Purpose Total

Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 2.8 times more return on investment than Purpose Total. However, IShares Core is 2.8 times more volatile than Purpose Total Return. It trades about 0.25 of its potential returns per unit of risk. Purpose Total Return is currently generating about 0.21 per unit of risk. If you would invest  3,812  in iShares Core MSCI on April 20, 2025 and sell it today you would earn a total of  419.00  from holding iShares Core MSCI or generate 10.99% return on investment over 90 days.

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

iShares Core MSCI  vs.  Purpose Total Return

iShares Core MSCI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Purpose Total Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Total Return are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Purpose Total is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Core and Purpose Total

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

The idea behind iShares Core MSCI and Purpose Total Return 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.