Correlation Between Empire State and IShares Core

Can any of the company-specific risk be diversified away by investing in both Empire State and IShares Core 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 Empire State and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Empire State Realty and iShares Core REIT, you can compare the effects of market volatilities on Empire State and IShares Core 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 Empire State with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and IShares Core.

Diversification Opportunities for Empire State and IShares Core

-0.19

Correlation Coefficient

Empire State  IShares Core

Good diversification

The 3 months correlation between Empire and IShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and iShares Core REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core REIT and Empire State 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 Empire State Realty are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core REIT has no effect on the direction of Empire State i.e., Empire State and IShares Core go up and down completely randomly.

Pair Corralation between Empire State and IShares Core

Given the investment horizon of 90 days Empire State Realty is expected to under-perform the IShares Core. In addition to that, Empire State is 1.59 times more volatile than iShares Core REIT. It trades about -0.23 of its total potential returns per unit of risk. iShares Core REIT is currently generating about 0.02 per unit of volatility. If you would invest  5,643  in iShares Core REIT on December 29, 2024 and sell it today you would earn a total of  60.00  from holding iShares Core REIT or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Empire State Realty  vs.  iShares Core REIT

Empire State Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Empire State Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

iShares Core REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares Core is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Empire State and IShares Core

The main advantage of trading using opposite Empire State and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.

The idea behind Empire State Realty and iShares Core REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .