Correlation Between IShares Residential and IShares Core

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

Diversification Opportunities for IShares Residential and IShares Core

0.72

Correlation Coefficient

IShares Residential  IShares Core

Poor diversification

The 3 months correlation between IShares and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Residential and 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 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 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 IShares Residential i.e., IShares Residential and IShares Core go up and down completely randomly.

Pair Corralation between IShares Residential and IShares Core

Considering the 90-day investment horizon iShares Residential and is expected to generate 1.05 times more return on investment than IShares Core. However, IShares Residential is 1.05 times more volatile than iShares Core REIT. It trades about 0.11 of its potential returns per unit of risk. iShares Core REIT is currently generating about 0.02 per unit of risk. If you would invest  7,977  in iShares Residential and on December 30, 2024 and sell it today you would earn a total of  607.00  from holding iShares Residential and or generate 7.61% 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.  iShares Core REIT

iShares Residential and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Residential and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, IShares Residential may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 IShares Residential and IShares Core

The main advantage of trading using opposite IShares Residential and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Residential 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 iShares Residential and 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.