Correlation Between IShares Utilities and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Short, you can compare the effects of market volatilities on IShares Utilities and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and SPDR Barclays.
Diversification Opportunities for IShares Utilities and SPDR Barclays
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and SPDR is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and SPDR Barclays Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Short 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Short has no effect on the direction of IShares Utilities i.e., IShares Utilities and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares Utilities and SPDR Barclays
Considering the 90-day investment horizon iShares Utilities ETF is expected to generate 7.91 times more return on investment than SPDR Barclays. However, IShares Utilities is 7.91 times more volatile than SPDR Barclays Short. It trades about 0.06 of its potential returns per unit of risk. SPDR Barclays Short is currently generating about 0.18 per unit of risk. If you would invest 7,629 in iShares Utilities ETF on November 19, 2024 and sell it today you would earn a total of 2,498 from holding iShares Utilities ETF or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. SPDR Barclays Short
Performance |
| Timeline |
| iShares Utilities ETF |
| SPDR Barclays Short |
IShares Utilities and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and SPDR Barclays
The main advantage of trading using opposite IShares Utilities and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' 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 |
| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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