Correlation Between IPath Bloomberg and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both IPath Bloomberg and Barclays Capital 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 Barclays Capital 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 Barclays Capital, you can compare the effects of market volatilities on IPath Bloomberg and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Bloomberg and Barclays Capital.
Diversification Opportunities for IPath Bloomberg and Barclays Capital
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPath and Barclays is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding iPath Bloomberg Commodity and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of IPath Bloomberg i.e., IPath Bloomberg and Barclays Capital go up and down completely randomly.
Pair Corralation between IPath Bloomberg and Barclays Capital
Considering the 90-day investment horizon iPath Bloomberg Commodity is expected to generate 0.76 times more return on investment than Barclays Capital. However, iPath Bloomberg Commodity is 1.31 times less risky than Barclays Capital. It trades about 0.0 of its potential returns per unit of risk. Barclays Capital is currently generating about -0.06 per unit of risk. If you would invest 3,301 in iPath Bloomberg Commodity on August 25, 2024 and sell it today you would lose (100.00) from holding iPath Bloomberg Commodity or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.19% |
| Values | Daily Returns |
iPath Bloomberg Commodity vs. Barclays Capital
Performance |
| Timeline |
| iPath Bloomberg Commodity |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IPath Bloomberg and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Bloomberg and Barclays Capital
The main advantage of trading using opposite IPath Bloomberg and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Bloomberg position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| IPath Bloomberg vs. iShares SP GSCI | IPath Bloomberg vs. Invesco DB Commodity | IPath Bloomberg vs. Invesco DB Base |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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