Correlation Between IShares Real and Investment Managers

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

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

Diversification Opportunities for IShares Real and Investment Managers

0.65

Correlation Coefficient

IShares Real  Investment Managers

Poor diversification

The 3 months correlation between IShares and Investment is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Real Estate and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers and IShares Real 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 Real Estate are associated (or correlated) with Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of IShares Real i.e., IShares Real and Investment Managers go up and down completely randomly.

Pair Corralation between IShares Real and Investment Managers

Considering the 90-day investment horizon iShares Real Estate is expected to generate 0.91 times more return on investment than Investment Managers. However, iShares Real Estate is 1.1 times less risky than Investment Managers. It trades about 0.06 of its potential returns per unit of risk. Investment Managers Series is currently generating about 0.0 per unit of risk. If you would invest  9,884  in iShares Real Estate on September 2, 2024 and sell it today you would earn a total of  347.00  from holding iShares Real Estate or generate 3.51% return on investment over 90 days.

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

iShares Real Estate  vs.  Investment Managers Series

iShares Real Estate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Real Estate are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IShares Real is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Investment Managers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment Managers Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Investment Managers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Real and Investment Managers

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

The idea behind iShares Real Estate and Investment Managers Series 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.