Correlation Between IShares Global and Staude Capital

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

By analyzing existing cross correlation between iShares Global Healthcare and Staude Capital Global, you can compare the effects of market volatilities on IShares Global and Staude Capital 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 Staude Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Staude Capital.

Diversification Opportunities for IShares Global and Staude Capital

0.26

Correlation Coefficient

IShares Global  Staude Capital

Modest diversification

The 3 months correlation between IShares and Staude is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare and Staude Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staude Capital Global 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 Healthcare are associated (or correlated) with Staude Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staude Capital Global has no effect on the direction of IShares Global i.e., IShares Global and Staude Capital go up and down completely randomly.

Pair Corralation between IShares Global and Staude Capital

Assuming the 90 days trading horizon iShares Global Healthcare is expected to generate 0.61 times more return on investment than Staude Capital. However, iShares Global Healthcare is 1.65 times less risky than Staude Capital. It trades about 0.13 of its potential returns per unit of risk. Staude Capital Global is currently generating about 0.04 per unit of risk. If you would invest  13,640  in iShares Global Healthcare on December 22, 2024 and sell it today you would earn a total of  913.00  from holding iShares Global Healthcare or generate 6.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iShares Global Healthcare  vs.  Staude Capital Global

iShares Global Healthcare

Risk-Adjusted Performance

OK

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

Staude Capital Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Staude Capital Global are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Staude Capital 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 IShares Global and Staude Capital

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

The idea behind iShares Global Healthcare and Staude Capital Global 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 Stocks Directory module to find actively traded stocks across global markets.