Correlation Between IShares IBonds and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both IShares IBonds and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI USA, you can compare the effects of market volatilities on IShares IBonds and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and SPDR MSCI.
Diversification Opportunities for IShares IBonds and SPDR MSCI
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SPDR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds Dec and SPDR MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI USA 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI USA has no effect on the direction of IShares IBonds i.e., IShares IBonds and SPDR MSCI go up and down completely randomly.
Pair Corralation between IShares IBonds and SPDR MSCI
Given the investment horizon of 90 days iShares iBonds Dec is expected to under-perform the SPDR MSCI. But the etf apears to be less risky and, when comparing its historical volatility, iShares iBonds Dec is 5.35 times less risky than SPDR MSCI. The etf trades about -0.23 of its potential returns per unit of risk. The SPDR MSCI USA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,236 in SPDR MSCI USA on August 26, 2024 and sell it today you would earn a total of 113.00 from holding SPDR MSCI USA or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBonds Dec vs. SPDR MSCI USA
Performance |
| Timeline |
| iShares iBonds Dec |
| SPDR MSCI USA |
IShares IBonds and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and SPDR MSCI
The main advantage of trading using opposite IShares IBonds and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec |
| SPDR MSCI vs. SPDR MSCI ACWI | SPDR MSCI vs. iShares iBonds Dec | SPDR MSCI vs. iShares iBonds Dec | SPDR MSCI 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |