Correlation Between IShares IBonds and IShares IBoxx
Can any of the company-specific risk be diversified away by investing in both IShares IBonds and IShares IBoxx 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 IBonds and IShares IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBonds 2029 and iShares iBoxx Investment, you can compare the effects of market volatilities on IShares IBonds and IShares IBoxx 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 IBonds with a short position of IShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and IShares IBoxx.
Diversification Opportunities for IShares IBonds and IShares IBoxx
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and IShares is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds 2029 and iShares iBoxx Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBoxx Investment and IShares IBonds 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 iBonds 2029 are associated (or correlated) with IShares IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBoxx Investment has no effect on the direction of IShares IBonds i.e., IShares IBonds and IShares IBoxx go up and down completely randomly.
Pair Corralation between IShares IBonds and IShares IBoxx
Given the investment horizon of 90 days iShares iBonds 2029 is expected to generate 0.55 times more return on investment than IShares IBoxx. However, iShares iBonds 2029 is 1.81 times less risky than IShares IBoxx. It trades about 0.14 of its potential returns per unit of risk. iShares iBoxx Investment is currently generating about -0.04 per unit of risk. If you would invest 2,329 in iShares iBonds 2029 on September 12, 2024 and sell it today you would earn a total of 49.00 from holding iShares iBonds 2029 or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBonds 2029 vs. iShares iBoxx Investment
Performance |
| Timeline |
| iShares iBonds 2029 |
| iShares iBoxx Investment |
IShares IBonds and IShares IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and IShares IBoxx
The main advantage of trading using opposite IShares IBonds and IShares IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds position performs unexpectedly, IShares IBoxx 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 IBoxx will offset losses from the drop in IShares IBoxx's long position.| IShares IBonds vs. iShares iBonds 2028 | IShares IBonds vs. iShares iBonds 2027 | IShares IBonds vs. iShares iBonds 2026 | IShares IBonds vs. iShares iBonds 2025 |
| IShares IBoxx vs. American Century STOXX | IShares IBoxx vs. Franklin Liberty Investment | IShares IBoxx vs. Aquagold International | IShares IBoxx vs. Morningstar Unconstrained Allocation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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