Correlation Between IShares Govt and IShares STOXX
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By analyzing existing cross correlation between iShares Govt Bond and iShares STOXX Europe, you can compare the effects of market volatilities on IShares Govt and IShares STOXX 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 Govt with a short position of IShares STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Govt and IShares STOXX.
Diversification Opportunities for IShares Govt and IShares STOXX
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Govt Bond and iShares STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares STOXX Europe and IShares Govt 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 Govt Bond are associated (or correlated) with IShares STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares STOXX Europe has no effect on the direction of IShares Govt i.e., IShares Govt and IShares STOXX go up and down completely randomly.
Pair Corralation between IShares Govt and IShares STOXX
Assuming the 90 days trading horizon IShares Govt is expected to generate 6.7 times less return on investment than IShares STOXX. But when comparing it to its historical volatility, iShares Govt Bond is 1.86 times less risky than IShares STOXX. It trades about 0.03 of its potential returns per unit of risk. iShares STOXX Europe is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,224 in iShares STOXX Europe on September 3, 2024 and sell it today you would earn a total of 775.00 from holding iShares STOXX Europe or generate 63.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Govt Bond vs. iShares STOXX Europe
Performance |
| Timeline |
| iShares Govt Bond |
| iShares STOXX Europe |
IShares Govt and IShares STOXX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Govt and IShares STOXX
The main advantage of trading using opposite IShares Govt and IShares STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Govt position performs unexpectedly, IShares STOXX 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 STOXX will offset losses from the drop in IShares STOXX's long position.| IShares Govt vs. UBS Fund Solutions | IShares Govt vs. Xtrackers II | IShares Govt vs. Xtrackers Nikkei 225 | IShares Govt vs. iShares VII PLC |
| IShares STOXX vs. iShares Govt Bond | IShares STOXX vs. iShares Global AAA AA | IShares STOXX vs. iShares Smart City | IShares STOXX vs. iShares Broad High |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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