Correlation Between IPath Bloomberg and IShares GSCI
Can any of the company-specific risk be diversified away by investing in both IPath Bloomberg and IShares GSCI 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 IPath Bloomberg and IShares GSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Bloomberg Commodity and iShares GSCI Commodity, you can compare the effects of market volatilities on IPath Bloomberg and IShares GSCI 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 IPath Bloomberg with a short position of IShares GSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Bloomberg and IShares GSCI.
Diversification Opportunities for IPath Bloomberg and IShares GSCI
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IPath and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iPath Bloomberg Commodity and iShares GSCI Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares GSCI Commodity and IPath 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 iPath Bloomberg Commodity are associated (or correlated) with IShares GSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares GSCI Commodity has no effect on the direction of IPath Bloomberg i.e., IPath Bloomberg and IShares GSCI go up and down completely randomly.
Pair Corralation between IPath Bloomberg and IShares GSCI
Considering the 90-day investment horizon iPath Bloomberg Commodity is expected to under-perform the IShares GSCI. But the etf apears to be less risky and, when comparing its historical volatility, iPath Bloomberg Commodity is 1.12 times less risky than IShares GSCI. The etf trades about 0.0 of its potential returns per unit of risk. The iShares GSCI Commodity is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,588 in iShares GSCI Commodity on August 31, 2024 and sell it today you would earn a total of 12.00 from holding iShares GSCI Commodity or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPath Bloomberg Commodity vs. iShares GSCI Commodity
Performance |
| Timeline |
| iPath Bloomberg Commodity |
| iShares GSCI Commodity |
IPath Bloomberg and IShares GSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Bloomberg and IShares GSCI
The main advantage of trading using opposite IPath Bloomberg and IShares GSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Bloomberg position performs unexpectedly, IShares GSCI 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 GSCI will offset losses from the drop in IShares GSCI's long position.| IPath Bloomberg vs. iShares SP GSCI | IPath Bloomberg vs. Invesco DB Commodity | IPath Bloomberg vs. Invesco DB Base |
| IShares GSCI vs. Invesco Optimum Yield | IShares GSCI vs. First Trust Global | IShares GSCI vs. iShares ESG Aware | IShares GSCI vs. iShares Fallen Angels |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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