Correlation Between SPDR Bloomberg and IShares Convertible
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and IShares Convertible 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 SPDR Bloomberg and IShares Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Convertible and iShares Convertible Bond, you can compare the effects of market volatilities on SPDR Bloomberg and IShares Convertible 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 SPDR Bloomberg with a short position of IShares Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and IShares Convertible.
Diversification Opportunities for SPDR Bloomberg and IShares Convertible
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Convertible and iShares Convertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Convertible Bond and SPDR 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 SPDR Bloomberg Convertible are associated (or correlated) with IShares Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Convertible Bond has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and IShares Convertible go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and IShares Convertible
Considering the 90-day investment horizon SPDR Bloomberg is expected to generate 1.06 times less return on investment than IShares Convertible. But when comparing it to its historical volatility, SPDR Bloomberg Convertible is 1.0 times less risky than IShares Convertible. It trades about 0.18 of its potential returns per unit of risk. iShares Convertible Bond is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7,645 in iShares Convertible Bond on November 3, 2024 and sell it today you would earn a total of 1,126 from holding iShares Convertible Bond or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Convertible vs. iShares Convertible Bond
Performance |
| Timeline |
| SPDR Bloomberg Conve |
| iShares Convertible Bond |
SPDR Bloomberg and IShares Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and IShares Convertible
The main advantage of trading using opposite SPDR Bloomberg and IShares Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, IShares Convertible 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 Convertible will offset losses from the drop in IShares Convertible's long position.| SPDR Bloomberg vs. iShares Convertible Bond | SPDR Bloomberg vs. Invesco Senior Loan | SPDR Bloomberg vs. SPDR Bloomberg Short | SPDR Bloomberg vs. Invesco Emerging Markets |
| IShares Convertible vs. iShares MSCI China | IShares Convertible vs. iShares Dividend and | IShares Convertible vs. iShares ESG Advanced | IShares Convertible vs. iShares MSCI USA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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