Correlation Between IShares Trust and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both IShares Trust and Grupo Hotelero 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 Trust and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Grupo Hotelero Santa, you can compare the effects of market volatilities on IShares Trust and Grupo Hotelero 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 Trust with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Grupo Hotelero.
Diversification Opportunities for IShares Trust and Grupo Hotelero
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Grupo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa and IShares Trust 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 Trust are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of IShares Trust i.e., IShares Trust and Grupo Hotelero go up and down completely randomly.
Pair Corralation between IShares Trust and Grupo Hotelero
Assuming the 90 days trading horizon iShares Trust is expected to generate 0.56 times more return on investment than Grupo Hotelero. However, iShares Trust is 1.79 times less risky than Grupo Hotelero. It trades about 0.11 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.02 per unit of risk. If you would invest 156,847 in iShares Trust on November 30, 2024 and sell it today you would earn a total of 163,782 from holding iShares Trust or generate 104.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Trust vs. Grupo Hotelero Santa
Performance |
| Timeline |
| iShares Trust |
| Grupo Hotelero Santa |
IShares Trust and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Grupo Hotelero
The main advantage of trading using opposite IShares Trust and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
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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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