Correlation Between IShares Residential and IShares Preferred

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

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

Diversification Opportunities for IShares Residential and IShares Preferred

0.32

Correlation Coefficient

IShares Residential  IShares Preferred

Weak diversification

The 3 months correlation between IShares and IShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Residential and and iShares Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Preferred and IShares Residential 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 Residential and are associated (or correlated) with IShares Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Preferred has no effect on the direction of IShares Residential i.e., IShares Residential and IShares Preferred go up and down completely randomly.

Pair Corralation between IShares Residential and IShares Preferred

Considering the 90-day investment horizon iShares Residential and is expected to under-perform the IShares Preferred. In addition to that, IShares Residential is 2.03 times more volatile than iShares Preferred and. It trades about -0.11 of its total potential returns per unit of risk. iShares Preferred and is currently generating about -0.06 per unit of volatility. If you would invest  3,267  in iShares Preferred and on September 16, 2024 and sell it today you would lose (56.00) from holding iShares Preferred and or give up 1.71% of portfolio value over 90 days.

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

iShares Residential and  vs.  iShares Preferred and

iShares Residential and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Residential and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

iShares Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Preferred and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, IShares Preferred is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IShares Residential and IShares Preferred

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

The idea behind iShares Residential and and iShares Preferred and 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.