Correlation Between IShares IBonds and IShares
Can any of the company-specific risk be diversified away by investing in both IShares IBonds and IShares 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBonds Dec and IShares, you can compare the effects of market volatilities on IShares IBonds and IShares 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and IShares.
Diversification Opportunities for IShares IBonds and IShares
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds Dec and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 Dec are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of IShares IBonds i.e., IShares IBonds and IShares go up and down completely randomly.
Pair Corralation between IShares IBonds and IShares
Given the investment horizon of 90 days iShares iBonds Dec is expected to generate 1.8 times more return on investment than IShares. However, IShares IBonds is 1.8 times more volatile than IShares. It trades about 0.09 of its potential returns per unit of risk. IShares is currently generating about 0.14 per unit of risk. If you would invest 2,557 in iShares iBonds Dec on August 28, 2024 and sell it today you would earn a total of 108.00 from holding iShares iBonds Dec or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.45% |
| Values | Daily Returns |
iShares iBonds Dec vs. IShares
Performance |
| Timeline |
| iShares iBonds Dec |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares IBonds and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and IShares
The main advantage of trading using opposite IShares IBonds and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares Trust | IShares IBonds vs. iShares iBonds Dec |
| IShares vs. iShares iBonds Dec | IShares vs. iShares iBonds Dec | IShares vs. iShares iBonds Dec | IShares vs. iShares iBonds Dec |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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