Correlation Between SPDR Bloomberg and IShares Interest
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and IShares Interest 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 Interest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Investment and iShares Interest Rate, you can compare the effects of market volatilities on SPDR Bloomberg and IShares Interest 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 Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and IShares Interest.
Diversification Opportunities for SPDR Bloomberg and IShares Interest
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Investment and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate 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 Investment are associated (or correlated) with IShares Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and IShares Interest go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and IShares Interest
Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.71 times less return on investment than IShares Interest. But when comparing it to its historical volatility, SPDR Bloomberg Investment is 3.56 times less risky than IShares Interest. It trades about 0.4 of its potential returns per unit of risk. iShares Interest Rate is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9,246 in iShares Interest Rate on August 24, 2024 and sell it today you would earn a total of 70.00 from holding iShares Interest Rate or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR Bloomberg Investment vs. iShares Interest Rate
Performance |
| Timeline |
| SPDR Bloomberg Investment |
| iShares Interest Rate |
SPDR Bloomberg and IShares Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and IShares Interest
The main advantage of trading using opposite SPDR Bloomberg and IShares Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, IShares Interest 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 Interest will offset losses from the drop in IShares Interest's long position.| SPDR Bloomberg vs. iShares Floating Rate | SPDR Bloomberg vs. VanEck Investment Grade | SPDR Bloomberg vs. SPDR Blackstone Senior | SPDR Bloomberg vs. Invesco Ultra Short |
| IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Inflation Hedged | IShares Interest vs. ProShares Investment GradeInterest |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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