Correlation Between Invesco BulletShares and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Invesco BulletShares 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 Invesco BulletShares and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco BulletShares 2024 and iShares Trust, you can compare the effects of market volatilities on Invesco BulletShares 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 Invesco BulletShares with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BulletShares and IShares Trust.
Diversification Opportunities for Invesco BulletShares and IShares Trust
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and IShares is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BulletShares 2024 and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Invesco BulletShares 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 Invesco BulletShares 2024 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 Invesco BulletShares i.e., Invesco BulletShares and IShares Trust go up and down completely randomly.
Pair Corralation between Invesco BulletShares and IShares Trust
Given the investment horizon of 90 days Invesco BulletShares is expected to generate 4.44 times less return on investment than IShares Trust. But when comparing it to its historical volatility, Invesco BulletShares 2024 is 19.93 times less risky than IShares Trust. It trades about 0.69 of its potential returns per unit of risk. iShares Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,544 in iShares Trust on September 1, 2024 and sell it today you would earn a total of 39.00 from holding iShares Trust or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco BulletShares 2024 vs. iShares Trust
Performance |
| Timeline |
| Invesco BulletShares 2024 |
| iShares Trust |
Invesco BulletShares and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco BulletShares and IShares Trust
The main advantage of trading using opposite Invesco BulletShares and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco BulletShares 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.| Invesco BulletShares vs. Invesco BulletShares 2025 | Invesco BulletShares vs. Invesco BulletShares 2026 | Invesco BulletShares vs. Invesco BulletShares 2027 |
| IShares Trust vs. VanEck Vectors Moodys | IShares Trust vs. BondBloxx ETF Trust | IShares Trust vs. Vanguard ESG Corporate | IShares Trust vs. Vanguard Intermediate Term Corporate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |