Correlation Between IShares Aggregate and IShares Govt
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By analyzing existing cross correlation between iShares Aggregate Bond and iShares Govt Bond, you can compare the effects of market volatilities on IShares Aggregate and IShares Govt 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 Aggregate with a short position of IShares Govt. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Aggregate and IShares Govt.
Diversification Opportunities for IShares Aggregate and IShares Govt
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Aggregate Bond and iShares Govt Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Govt Bond and IShares Aggregate 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 Aggregate Bond are associated (or correlated) with IShares Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Govt Bond has no effect on the direction of IShares Aggregate i.e., IShares Aggregate and IShares Govt go up and down completely randomly.
Pair Corralation between IShares Aggregate and IShares Govt
Assuming the 90 days trading horizon iShares Aggregate Bond is expected to generate 0.63 times more return on investment than IShares Govt. However, iShares Aggregate Bond is 1.59 times less risky than IShares Govt. It trades about 0.09 of its potential returns per unit of risk. iShares Govt Bond is currently generating about 0.04 per unit of risk. If you would invest 538.00 in iShares Aggregate Bond on August 30, 2024 and sell it today you would earn a total of 6.00 from holding iShares Aggregate Bond or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Aggregate Bond vs. iShares Govt Bond
Performance |
| Timeline |
| iShares Aggregate Bond |
| iShares Govt Bond |
IShares Aggregate and IShares Govt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Aggregate and IShares Govt
The main advantage of trading using opposite IShares Aggregate and IShares Govt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Aggregate position performs unexpectedly, IShares Govt 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 Govt will offset losses from the drop in IShares Govt's long position.| IShares Aggregate vs. UBS Fund Solutions | IShares Aggregate vs. Xtrackers II | IShares Aggregate vs. Xtrackers Nikkei 225 | IShares Aggregate vs. iShares VII PLC |
| IShares Govt vs. iShares Global AAA AA | IShares Govt vs. iShares Smart City | IShares Govt vs. iShares Broad High | IShares Govt vs. iShares Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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