Correlation Between Barclays PLC and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Barclays PLC and IShares Trust 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 Barclays PLC and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC and iShares Trust , you can compare the effects of market volatilities on Barclays PLC and IShares Trust 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 Barclays PLC with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and IShares Trust.
Diversification Opportunities for Barclays PLC and IShares Trust
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barclays and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Barclays PLC 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 Barclays PLC are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Barclays PLC i.e., Barclays PLC and IShares Trust go up and down completely randomly.
Pair Corralation between Barclays PLC and IShares Trust
Assuming the 90 days trading horizon Barclays PLC is expected to generate 1.24 times more return on investment than IShares Trust. However, Barclays PLC is 1.24 times more volatile than iShares Trust . It trades about 0.24 of its potential returns per unit of risk. iShares Trust is currently generating about 0.19 per unit of risk. If you would invest 7,600 in Barclays PLC on September 19, 2024 and sell it today you would earn a total of 704.00 from holding Barclays PLC or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays PLC vs. iShares Trust
Performance |
| Timeline |
| Barclays PLC |
| iShares Trust |
Barclays PLC and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and IShares Trust
The main advantage of trading using opposite Barclays PLC and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| Barclays PLC vs. HSBC Holdings plc | Barclays PLC vs. Wells Fargo | Barclays PLC vs. BTG Pactual Logstica | Barclays PLC vs. Plano Plano Desenvolvimento |
| IShares Trust vs. Energisa SA | IShares Trust vs. BTG Pactual Logstica | IShares Trust vs. Plano Plano Desenvolvimento | IShares Trust vs. Companhia Habitasul de |
Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |