Correlation Between IShares Residential and Global X

Can any of the company-specific risk be diversified away by investing in both IShares Residential and Global X 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 Global X 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 Global X SuperDividend, you can compare the effects of market volatilities on IShares Residential and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Residential and Global X.

Diversification Opportunities for IShares Residential and Global X

0.77

Correlation Coefficient

IShares Residential  Global X

Poor diversification

The 3 months correlation between IShares and Global is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Residential and and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperDividend has no effect on the direction of IShares Residential i.e., IShares Residential and Global X go up and down completely randomly.

Pair Corralation between IShares Residential and Global X

Considering the 90-day investment horizon iShares Residential and is expected to generate 1.63 times more return on investment than Global X. However, IShares Residential is 1.63 times more volatile than Global X SuperDividend. It trades about 0.03 of its potential returns per unit of risk. Global X SuperDividend is currently generating about 0.0 per unit of risk. If you would invest  8,537  in iShares Residential and on December 5, 2024 and sell it today you would earn a total of  167.00  from holding iShares Residential and or generate 1.96% return on investment over 90 days.

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

iShares Residential and  vs.  Global X SuperDividend

iShares Residential and

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Residential and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, IShares Residential is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Global X SuperDividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Global X is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares Residential and Global X

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

The idea behind iShares Residential and and Global X SuperDividend 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.