Correlation Between IShares Trust and JIB
Can any of the company-specific risk be diversified away by investing in both IShares Trust and JIB 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 Trust and JIB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and JIB, you can compare the effects of market volatilities on IShares Trust and JIB 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 Trust with a short position of JIB. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and JIB.
Diversification Opportunities for IShares Trust and JIB
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and JIB is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and JIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIB and IShares Trust 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 Trust are associated (or correlated) with JIB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIB has no effect on the direction of IShares Trust i.e., IShares Trust and JIB go up and down completely randomly.
Pair Corralation between IShares Trust and JIB
Given the investment horizon of 90 days iShares Trust is expected to generate 3.51 times more return on investment than JIB. However, IShares Trust is 3.51 times more volatile than JIB. It trades about 0.04 of its potential returns per unit of risk. JIB is currently generating about 0.02 per unit of risk. If you would invest 6,903 in iShares Trust on August 28, 2024 and sell it today you would earn a total of 1,280 from holding iShares Trust or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
iShares Trust vs. JIB
Performance |
| Timeline |
| iShares Trust |
| JIB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Trust and JIB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and JIB
The main advantage of trading using opposite IShares Trust and JIB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, JIB 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 JIB will offset losses from the drop in JIB's long position.| IShares Trust vs. First Trust Exchange Traded | IShares Trust vs. Ultimus Managers Trust | IShares Trust vs. Horizon Kinetics Medical | IShares Trust vs. Harbor Health Care |
| JIB vs. iShares MSCI EAFE | JIB vs. iShares iBoxx Investment | JIB vs. iShares TIPS Bond | JIB vs. iShares 1 3 Year |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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