Correlation Between IShares IBonds and US Treasury
Can any of the company-specific risk be diversified away by investing in both IShares IBonds and US Treasury 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 US Treasury 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 US Treasury 6, you can compare the effects of market volatilities on IShares IBonds and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and US Treasury.
Diversification Opportunities for IShares IBonds and US Treasury
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and XBIL is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds Dec and US Treasury 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 6 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 6 has no effect on the direction of IShares IBonds i.e., IShares IBonds and US Treasury go up and down completely randomly.
Pair Corralation between IShares IBonds and US Treasury
Given the investment horizon of 90 days iShares iBonds Dec is expected to generate 14.88 times more return on investment than US Treasury. However, IShares IBonds is 14.88 times more volatile than US Treasury 6. It trades about 0.07 of its potential returns per unit of risk. US Treasury 6 is currently generating about 0.71 per unit of risk. If you would invest 2,345 in iShares iBonds Dec on September 1, 2024 and sell it today you would earn a total of 91.00 from holding iShares iBonds Dec or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares iBonds Dec vs. US Treasury 6
Performance |
| Timeline |
| iShares iBonds Dec |
| US Treasury 6 |
IShares IBonds and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and US Treasury
The main advantage of trading using opposite IShares IBonds and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| IShares IBonds vs. Global X Funds | IShares IBonds vs. US Treasury 12 | IShares IBonds vs. Tidal Trust II | IShares IBonds vs. Franklin Liberty Treasury |
| US Treasury vs. Rbb Fund | US Treasury vs. US Treasury 12 | US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| 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 |