Correlation Between Hoteles City and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Hoteles City and IShares Trust 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 Hoteles City and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and iShares Trust , you can compare the effects of market volatilities on Hoteles City and IShares Trust 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 Hoteles City with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and IShares Trust.
Diversification Opportunities for Hoteles City and IShares Trust
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hoteles and IShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Hoteles City 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 Hoteles City Express are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Hoteles City i.e., Hoteles City and IShares Trust go up and down completely randomly.
Pair Corralation between Hoteles City and IShares Trust
Assuming the 90 days trading horizon Hoteles City Express is expected to under-perform the IShares Trust. In addition to that, Hoteles City is 1.93 times more volatile than iShares Trust . It trades about -0.02 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.08 per unit of volatility. If you would invest 170,319 in iShares Trust on August 31, 2024 and sell it today you would earn a total of 40,581 from holding iShares Trust or generate 23.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoteles City Express vs. iShares Trust
Performance |
| Timeline |
| Hoteles City Express |
| iShares Trust |
Hoteles City and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoteles City and IShares Trust
The main advantage of trading using opposite Hoteles City and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| Hoteles City vs. CEMEX SAB de | Hoteles City vs. Grupo Financiero Banorte | Hoteles City vs. Grupo Bimbo SAB | Hoteles City vs. Fomento Econmico Mexicano |
| IShares Trust vs. Promotora y Operadora | IShares Trust vs. UnitedHealth Group Incorporated | IShares Trust vs. Qulitas Controladora SAB | IShares Trust vs. Hoteles City Express |
Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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