Correlation Between Howard Hughes and IShares Mortgage

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

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

Diversification Opportunities for Howard Hughes and IShares Mortgage

-0.15

Correlation Coefficient

Howard Hughes  IShares Mortgage

Good diversification

The 3 months correlation between Howard and IShares is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Howard Hughes and iShares Mortgage Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Mortgage Real and Howard Hughes 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 Howard Hughes are associated (or correlated) with IShares Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Mortgage Real has no effect on the direction of Howard Hughes i.e., Howard Hughes and IShares Mortgage go up and down completely randomly.

Pair Corralation between Howard Hughes and IShares Mortgage

Considering the 90-day investment horizon Howard Hughes is expected to generate 25.96 times less return on investment than IShares Mortgage. In addition to that, Howard Hughes is 2.09 times more volatile than iShares Mortgage Real. It trades about 0.0 of its total potential returns per unit of risk. iShares Mortgage Real is currently generating about 0.13 per unit of volatility. If you would invest  2,134  in iShares Mortgage Real on December 20, 2024 and sell it today you would earn a total of  186.00  from holding iShares Mortgage Real or generate 8.72% return on investment over 90 days.

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

Howard Hughes  vs.  iShares Mortgage Real

Howard Hughes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Howard Hughes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Howard Hughes is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Mortgage Real

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Mortgage Real are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, IShares Mortgage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Howard Hughes and IShares Mortgage

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

The idea behind Howard Hughes and iShares Mortgage Real 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.