Correlation Between IShares Utilities and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and Barclays Capital 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 Utilities and Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and Barclays Capital, you can compare the effects of market volatilities on IShares Utilities and Barclays Capital 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 Utilities with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and Barclays Capital.
Diversification Opportunities for IShares Utilities and Barclays Capital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Barclays is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and IShares Utilities 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 Utilities ETF are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of IShares Utilities i.e., IShares Utilities and Barclays Capital go up and down completely randomly.
Pair Corralation between IShares Utilities and Barclays Capital
If you would invest 10,301 in iShares Utilities ETF on August 25, 2024 and sell it today you would earn a total of 63.00 from holding iShares Utilities ETF or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
iShares Utilities ETF vs. Barclays Capital
Performance |
| Timeline |
| iShares Utilities ETF |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Utilities and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and Barclays Capital
The main advantage of trading using opposite IShares Utilities and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares Consumer Discretionary | IShares Utilities vs. iShares Consumer Staples | IShares Utilities vs. iShares Telecommunications ETF |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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