Correlation Between IShares Global and Hotel Property
Can any of the company-specific risk be diversified away by investing in both IShares Global and Hotel Property 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 Global and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Healthcare and Hotel Property Investments, you can compare the effects of market volatilities on IShares Global and Hotel Property 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 Global with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Hotel Property.
Diversification Opportunities for IShares Global and Hotel Property
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Hotel is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and IShares Global 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 Global Healthcare are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of IShares Global i.e., IShares Global and Hotel Property go up and down completely randomly.
Pair Corralation between IShares Global and Hotel Property
Assuming the 90 days trading horizon IShares Global is expected to generate 1.7 times less return on investment than Hotel Property. But when comparing it to its historical volatility, iShares Global Healthcare is 2.1 times less risky than Hotel Property. It trades about 0.04 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 308.00 in Hotel Property Investments on September 2, 2024 and sell it today you would earn a total of 62.00 from holding Hotel Property Investments or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. Hotel Property Investments
Performance |
| Timeline |
| iShares Global Healthcare |
| Hotel Property Inves |
IShares Global and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Hotel Property
The main advantage of trading using opposite IShares Global and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| IShares Global vs. iShares MSCI Emerging | IShares Global vs. iShares Global Aggregate | IShares Global vs. iShares CoreSP MidCap | IShares Global vs. iShares SP 500 |
| Hotel Property vs. Step One Clothing | Hotel Property vs. Homeco Daily Needs | Hotel Property vs. Stelar Metals | Hotel Property vs. Sky Metals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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