Correlation Between IShares Convertible and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both IShares Convertible and SPDR Bloomberg 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 Convertible and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Convertible Bond and SPDR Bloomberg Convertible, you can compare the effects of market volatilities on IShares Convertible and SPDR Bloomberg 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 Convertible with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Convertible and SPDR Bloomberg.
Diversification Opportunities for IShares Convertible and SPDR Bloomberg
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Convertible Bond and SPDR Bloomberg Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Conve and IShares Convertible 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 Convertible Bond are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Conve has no effect on the direction of IShares Convertible i.e., IShares Convertible and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between IShares Convertible and SPDR Bloomberg
Given the investment horizon of 90 days iShares Convertible Bond is expected to generate 1.01 times more return on investment than SPDR Bloomberg. However, IShares Convertible is 1.01 times more volatile than SPDR Bloomberg Convertible. It trades about 0.1 of its potential returns per unit of risk. SPDR Bloomberg Convertible is currently generating about 0.1 per unit of risk. If you would invest 6,794 in iShares Convertible Bond on August 30, 2024 and sell it today you would earn a total of 2,113 from holding iShares Convertible Bond or generate 31.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Convertible Bond vs. SPDR Bloomberg Convertible
Performance |
| Timeline |
| iShares Convertible Bond |
| SPDR Bloomberg Conve |
IShares Convertible and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Convertible and SPDR Bloomberg
The main advantage of trading using opposite IShares Convertible and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Convertible position performs unexpectedly, SPDR Bloomberg 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 Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| IShares Convertible vs. VanEck Vectors Moodys | IShares Convertible vs. BondBloxx ETF Trust | IShares Convertible vs. Vanguard ESG Corporate | IShares Convertible vs. Vanguard Intermediate Term Corporate |
| SPDR Bloomberg vs. iShares Convertible Bond | SPDR Bloomberg vs. Invesco Senior Loan | SPDR Bloomberg vs. SPDR Bloomberg Short | SPDR Bloomberg vs. Invesco Emerging Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |