Correlation Between IShares Global and Honeywell International
Can any of the company-specific risk be diversified away by investing in both IShares Global and Honeywell International 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 Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Timber and Honeywell International, you can compare the effects of market volatilities on IShares Global and Honeywell International 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 Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Honeywell International.
Diversification Opportunities for IShares Global and Honeywell International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Honeywell is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Timber and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International 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 Timber are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of IShares Global i.e., IShares Global and Honeywell International go up and down completely randomly.
Pair Corralation between IShares Global and Honeywell International
Assuming the 90 days trading horizon iShares Global Timber is expected to generate 0.1 times more return on investment than Honeywell International. However, iShares Global Timber is 10.13 times less risky than Honeywell International. It trades about 0.22 of its potential returns per unit of risk. Honeywell International is currently generating about -0.12 per unit of risk. 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 |
iShares Global Timber vs. Honeywell International
Performance |
| Timeline |
| iShares Global Timber |
| Honeywell International |
IShares Global and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Honeywell International
The main advantage of trading using opposite IShares Global and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| IShares Global vs. The Select Sector | IShares Global vs. ProShares Trust | IShares Global vs. iShares Trust | IShares Global vs. Vanguard World |
| Honeywell International vs. Micron Technology | Honeywell International vs. United States Steel | Honeywell International vs. Cognizant Technology Solutions | Honeywell International vs. DXC Technology |
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.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |