Correlation Between Mairs Power and IShares Short
Can any of the company-specific risk be diversified away by investing in both Mairs Power and IShares Short 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 Mairs Power and IShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Minnesota and iShares Short Maturity, you can compare the effects of market volatilities on Mairs Power and IShares Short 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 Mairs Power with a short position of IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and IShares Short.
Diversification Opportunities for Mairs Power and IShares Short
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mairs and IShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Minnesota and iShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Maturity and Mairs Power 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 Mairs Power Minnesota are associated (or correlated) with IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Maturity has no effect on the direction of Mairs Power i.e., Mairs Power and IShares Short go up and down completely randomly.
Pair Corralation between Mairs Power and IShares Short
Given the investment horizon of 90 days Mairs Power Minnesota is expected to generate 8.11 times more return on investment than IShares Short. However, Mairs Power is 8.11 times more volatile than iShares Short Maturity. It trades about 0.07 of its potential returns per unit of risk. iShares Short Maturity is currently generating about 0.41 per unit of risk. If you would invest 2,204 in Mairs Power Minnesota on November 7, 2024 and sell it today you would earn a total of 11.00 from holding Mairs Power Minnesota or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Mairs Power Minnesota vs. iShares Short Maturity
Performance |
| Timeline |
| Mairs Power Minnesota |
| iShares Short Maturity |
Mairs Power and IShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and IShares Short
The main advantage of trading using opposite Mairs Power and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, IShares Short 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 Short will offset losses from the drop in IShares Short's long position.| Mairs Power vs. BlackRock Intermediate Muni | Mairs Power vs. IQ MacKay Municipal | Mairs Power vs. Overlay Shares Municipal | Mairs Power vs. IQ MacKay Municipal |
| IShares Short vs. iShares Treasury Floating | IShares Short vs. iShares Short Term National | IShares Short vs. iShares Short Maturity | IShares Short vs. iShares Interest Rate |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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