Correlation Between IShares 3 and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares 3 and IShares Core 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 3 and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 3 7 Year and iShares Core Total, you can compare the effects of market volatilities on IShares 3 and IShares Core 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 3 with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 3 and IShares Core.
Diversification Opportunities for IShares 3 and IShares Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares 3 7 Year and iShares Core Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Total and IShares 3 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 3 7 Year are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Total has no effect on the direction of IShares 3 i.e., IShares 3 and IShares Core go up and down completely randomly.
Pair Corralation between IShares 3 and IShares Core
Considering the 90-day investment horizon iShares 3 7 Year is expected to under-perform the IShares Core. But the etf apears to be less risky and, when comparing its historical volatility, iShares 3 7 Year is 1.27 times less risky than IShares Core. The etf trades about -0.08 of its potential returns per unit of risk. The iShares Core Total is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,635 in iShares Core Total on August 31, 2024 and sell it today you would lose (30.00) from holding iShares Core Total or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares 3 7 Year vs. iShares Core Total
Performance |
| Timeline |
| iShares 3 7 |
| iShares Core Total |
IShares 3 and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 3 and IShares Core
The main advantage of trading using opposite IShares 3 and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 3 position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| IShares 3 vs. iShares 10 20 Year | IShares 3 vs. iShares 7 10 Year | IShares 3 vs. iShares 1 3 Year | IShares 3 vs. iShares MBS ETF |
| IShares Core vs. iShares Core 1 5 | IShares Core vs. iShares Core International | IShares Core vs. iShares Treasury Bond | IShares Core 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |