Correlation Between IShares Intermediate and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares Intermediate and SPDR Barclays 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 Intermediate and SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Intermediate GovernmentCredit and SPDR Barclays Long, you can compare the effects of market volatilities on IShares Intermediate and SPDR Barclays 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 Intermediate with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Intermediate and SPDR Barclays.
Diversification Opportunities for IShares Intermediate and SPDR Barclays
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SPDR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Intermediate Governmen and SPDR Barclays Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Long and IShares Intermediate 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 Intermediate GovernmentCredit are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Long has no effect on the direction of IShares Intermediate i.e., IShares Intermediate and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares Intermediate and SPDR Barclays
Considering the 90-day investment horizon iShares Intermediate GovernmentCredit is expected to generate 0.28 times more return on investment than SPDR Barclays. However, iShares Intermediate GovernmentCredit is 3.58 times less risky than SPDR Barclays. It trades about 0.1 of its potential returns per unit of risk. SPDR Barclays Long is currently generating about -0.16 per unit of risk. If you would invest 10,535 in iShares Intermediate GovernmentCredit on January 7, 2025 and sell it today you would earn a total of 48.00 from holding iShares Intermediate GovernmentCredit 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 |
iShares Intermediate Governmen vs. SPDR Barclays Long
Performance |
| Timeline |
| iShares Intermediate |
| SPDR Barclays Long |
IShares Intermediate and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Intermediate and SPDR Barclays
The main advantage of trading using opposite IShares Intermediate and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Intermediate position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.| IShares Intermediate vs. iShares GovernmentCredit Bond | IShares Intermediate vs. iShares Agency Bond | IShares Intermediate vs. iShares New York | IShares Intermediate vs. iShares MBS ETF |
| SPDR Barclays vs. iShares 10 Year | SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. FlexShares Credit Scored Long |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |