Correlation Between IShares IBoxx and BondBloxx ETF
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx and BondBloxx ETF 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 IBoxx and BondBloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx High and BondBloxx ETF Trust, you can compare the effects of market volatilities on IShares IBoxx and BondBloxx ETF 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 IBoxx with a short position of BondBloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and BondBloxx ETF.
Diversification Opportunities for IShares IBoxx and BondBloxx ETF
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and BondBloxx is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx High and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and IShares IBoxx 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 iBoxx High are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and BondBloxx ETF go up and down completely randomly.
Pair Corralation between IShares IBoxx and BondBloxx ETF
Considering the 90-day investment horizon IShares IBoxx is expected to generate 1.04 times less return on investment than BondBloxx ETF. But when comparing it to its historical volatility, iShares iBoxx High is 2.04 times less risky than BondBloxx ETF. It trades about 0.37 of its potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,727 in BondBloxx ETF Trust on September 1, 2024 and sell it today you would earn a total of 66.00 from holding BondBloxx ETF Trust or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares iBoxx High vs. BondBloxx ETF Trust
Performance |
| Timeline |
| iShares iBoxx High |
| BondBloxx ETF Trust |
IShares IBoxx and BondBloxx ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and BondBloxx ETF
The main advantage of trading using opposite IShares IBoxx and BondBloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx position performs unexpectedly, BondBloxx ETF 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 BondBloxx ETF will offset losses from the drop in BondBloxx ETF's long position.| IShares IBoxx vs. iShares iBoxx Investment | IShares IBoxx vs. SPDR Bloomberg High | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 20 Year |
| BondBloxx ETF vs. BondBloxx ETF Trust | BondBloxx ETF vs. BondBloxx ETF Trust | BondBloxx ETF vs. BondBloxx ETF Trust | BondBloxx ETF vs. BondBloxx ETF Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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