Correlation Between IShares Core and Ninepoint High

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

By analyzing existing cross correlation between iShares Core SP and Ninepoint High Interest, you can compare the effects of market volatilities on IShares Core and Ninepoint High 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 Ninepoint High. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Ninepoint High.

Diversification Opportunities for IShares Core and Ninepoint High

-0.29

Correlation Coefficient

IShares Core  Ninepoint High

Very good diversification

The 3 months correlation between IShares and Ninepoint is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Ninepoint High Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint High Interest 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 SP are associated (or correlated) with Ninepoint High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint High Interest has no effect on the direction of IShares Core i.e., IShares Core and Ninepoint High go up and down completely randomly.

Pair Corralation between IShares Core and Ninepoint High

Assuming the 90 days trading horizon iShares Core SP is expected to generate 12.59 times more return on investment than Ninepoint High. However, IShares Core is 12.59 times more volatile than Ninepoint High Interest. It trades about 0.32 of its potential returns per unit of risk. Ninepoint High Interest is currently generating about -0.01 per unit of risk. If you would invest  5,692  in iShares Core SP on April 25, 2025 and sell it today you would earn a total of  839.00  from holding iShares Core SP or generate 14.74% return on investment over 90 days.

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

iShares Core SP  vs.  Ninepoint High Interest

iShares Core SP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IShares Core displayed solid returns over the last few months and may actually be approaching a breakup point.

Ninepoint High Interest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ninepoint High Interest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Ninepoint High is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Core and Ninepoint High

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

The idea behind iShares Core SP and Ninepoint High Interest 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.