Correlation Between IShares Treasury and IShares 1
Can any of the company-specific risk be diversified away by investing in both IShares Treasury and IShares 1 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 IShares Treasury and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Treasury Bond and iShares 1 5 Year, you can compare the effects of market volatilities on IShares Treasury and IShares 1 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 Treasury with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and IShares 1.
Diversification Opportunities for IShares Treasury and IShares 1
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Bond and iShares 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 5 and IShares Treasury 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 Treasury Bond are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 5 has no effect on the direction of IShares Treasury i.e., IShares Treasury and IShares 1 go up and down completely randomly.
Pair Corralation between IShares Treasury and IShares 1
Given the investment horizon of 90 days iShares Treasury Bond is expected to generate 2.24 times more return on investment than IShares 1. However, IShares Treasury is 2.24 times more volatile than iShares 1 5 Year. It trades about 0.26 of its potential returns per unit of risk. iShares 1 5 Year is currently generating about 0.32 per unit of risk. If you would invest 2,255 in iShares Treasury Bond on September 13, 2024 and sell it today you would earn a total of 32.00 from holding iShares Treasury Bond or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Treasury Bond vs. iShares 1 5 Year
Performance |
| Timeline |
| iShares Treasury Bond |
| iShares 1 5 |
IShares Treasury and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Treasury and IShares 1
The main advantage of trading using opposite IShares Treasury and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury position performs unexpectedly, IShares 1 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 1 will offset losses from the drop in IShares 1's long position.| IShares Treasury vs. iShares MBS ETF | IShares Treasury vs. iShares Core Total | IShares Treasury vs. iShares 3 7 Year | IShares Treasury vs. iShares 10 20 Year |
| IShares 1 vs. iShares 5 10 Year | IShares 1 vs. iShares 0 5 Year | IShares 1 vs. SPDR Barclays Short | IShares 1 vs. iShares Core Total |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |