Correlation Between IShares 3 and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both IShares 3 and SPDR FTSE 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 SPDR FTSE 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 SPDR FTSE International, you can compare the effects of market volatilities on IShares 3 and SPDR FTSE 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 SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 3 and SPDR FTSE.
Diversification Opportunities for IShares 3 and SPDR FTSE
Almost no diversification
The 3 months correlation between IShares and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares 3 7 Year and SPDR FTSE International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE International 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 SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE International has no effect on the direction of IShares 3 i.e., IShares 3 and SPDR FTSE go up and down completely randomly.
Pair Corralation between IShares 3 and SPDR FTSE
Considering the 90-day investment horizon iShares 3 7 Year is expected to generate 0.45 times more return on investment than SPDR FTSE. However, iShares 3 7 Year is 2.2 times less risky than SPDR FTSE. It trades about 0.03 of its potential returns per unit of risk. SPDR FTSE International is currently generating about -0.05 per unit of risk. If you would invest 11,667 in iShares 3 7 Year on August 30, 2024 and sell it today you would earn a total of 19.00 from holding iShares 3 7 Year or generate 0.16% return on investment 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. SPDR FTSE International
Performance |
| Timeline |
| iShares 3 7 |
| SPDR FTSE International |
IShares 3 and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 3 and SPDR FTSE
The main advantage of trading using opposite IShares 3 and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 3 position performs unexpectedly, SPDR FTSE 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 FTSE will offset losses from the drop in SPDR FTSE'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 |
| SPDR FTSE vs. SPDR Bloomberg Emerging | SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. SPDR Bloomberg Barclays | SPDR FTSE vs. VanEck JP Morgan |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |