Correlation Between IShares Home and Kelly Strategic

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

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

Diversification Opportunities for IShares Home and Kelly Strategic

-0.69

Correlation Coefficient

IShares Home  Kelly Strategic

Excellent diversification

The 3 months correlation between IShares and Kelly is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Home Construction and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic Mana and IShares Home 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 Home Construction are associated (or correlated) with Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of IShares Home i.e., IShares Home and Kelly Strategic go up and down completely randomly.

Pair Corralation between IShares Home and Kelly Strategic

If you would invest  8,951  in iShares Home Construction on September 28, 2024 and sell it today you would earn a total of  1,544  from holding iShares Home Construction or generate 17.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.37%
Values	Daily Returns

iShares Home Construction  vs.  Kelly Strategic Management

iShares Home Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Home Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Strategic Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kelly Strategic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares Home and Kelly Strategic

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

The idea behind iShares Home Construction and Kelly Strategic Management 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.