Correlation Between IShares Bloomberg and United States
Can any of the company-specific risk be diversified away by investing in both IShares Bloomberg and United States 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 Bloomberg and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Bloomberg Roll and United States Commodity, you can compare the effects of market volatilities on IShares Bloomberg and United States 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 Bloomberg with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bloomberg and United States.
Diversification Opportunities for IShares Bloomberg and United States
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and United is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bloomberg Roll and United States Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Commodity and IShares Bloomberg 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 Bloomberg Roll are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Commodity has no effect on the direction of IShares Bloomberg i.e., IShares Bloomberg and United States go up and down completely randomly.
Pair Corralation between IShares Bloomberg and United States
Given the investment horizon of 90 days iShares Bloomberg Roll is expected to under-perform the United States. But the etf apears to be less risky and, when comparing its historical volatility, iShares Bloomberg Roll is 1.19 times less risky than United States. The etf trades about -0.01 of its potential returns per unit of risk. The United States Commodity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,420 in United States Commodity on September 1, 2024 and sell it today you would earn a total of 1,076 from holding United States Commodity or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Bloomberg Roll vs. United States Commodity
Performance |
| Timeline |
| iShares Bloomberg Roll |
| United States Commodity |
IShares Bloomberg and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bloomberg and United States
The main advantage of trading using opposite IShares Bloomberg and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bloomberg position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| IShares Bloomberg vs. abrdn Bloomberg All | IShares Bloomberg vs. GraniteShares Bloomberg Commodity | IShares Bloomberg vs. iShares GSCI Commodity | IShares Bloomberg vs. abrdn Bloomberg All |
| United States vs. KraneShares Bosera MSCI | United States vs. WisdomTree Continuous Commodity | United States vs. iPath Bloomberg Commodity | United States vs. Cambria Shareholder Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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