Correlation Between Honeywell International and IShares Global
Can any of the company-specific risk be diversified away by investing in both Honeywell International and IShares Global 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 Honeywell International and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and iShares Global Timber, you can compare the effects of market volatilities on Honeywell International and IShares Global 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 Honeywell International with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and IShares Global.
Diversification Opportunities for Honeywell International and IShares Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Honeywell and IShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber and Honeywell International 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 Honeywell International are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Honeywell International i.e., Honeywell International and IShares Global go up and down completely randomly.
Pair Corralation between Honeywell International and IShares Global
Assuming the 90 days trading horizon Honeywell International is expected to under-perform the IShares Global. In addition to that, Honeywell International is 10.13 times more volatile than iShares Global Timber. It trades about -0.12 of its total potential returns per unit of risk. iShares Global Timber is currently generating about 0.22 per unit of volatility. If you would invest 177,917 in iShares Global Timber on September 23, 2024 and sell it today you would earn a total of 680.00 from holding iShares Global Timber or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Honeywell International vs. iShares Global Timber
Performance |
| Timeline |
| Honeywell International |
| iShares Global Timber |
Honeywell International and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and IShares Global
The main advantage of trading using opposite Honeywell International and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| Honeywell International vs. Micron Technology | Honeywell International vs. United States Steel | Honeywell International vs. Cognizant Technology Solutions | Honeywell International vs. DXC Technology |
| IShares Global vs. The Select Sector | IShares Global vs. ProShares Trust | IShares Global vs. iShares Trust | IShares Global vs. Vanguard World |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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