Correlation Between IShares 10 and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares 10 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 10 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 10 Year and iShares Core 10, you can compare the effects of market volatilities on IShares 10 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 10 with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 10 and IShares Core.
Diversification Opportunities for IShares 10 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 10 Year and iShares Core 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core 10 and IShares 10 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 10 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 10 has no effect on the direction of IShares 10 i.e., IShares 10 and IShares Core go up and down completely randomly.
Pair Corralation between IShares 10 and IShares Core
Given the investment horizon of 90 days iShares 10 Year is expected to generate 0.97 times more return on investment than IShares Core. However, iShares 10 Year is 1.04 times less risky than IShares Core. It trades about 0.08 of its potential returns per unit of risk. iShares Core 10 is currently generating about 0.08 per unit of risk. If you would invest 5,089 in iShares 10 Year on August 28, 2024 and sell it today you would earn a total of 72.00 from holding iShares 10 Year or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares 10 Year vs. iShares Core 10
Performance |
| Timeline |
| iShares 10 Year |
| iShares Core 10 |
IShares 10 and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 10 and IShares Core
The main advantage of trading using opposite IShares 10 and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 10 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 10 vs. SPDR Barclays Long | IShares 10 vs. iShares 5 10 Year | IShares 10 vs. iShares 1 5 Year | IShares 10 vs. iShares Core 10 |
| IShares Core vs. FlexShares Credit Scored Corporate | IShares Core vs. FlexShares Disciplined Duration | IShares Core vs. FlexShares Quality Large | IShares Core vs. First Trust Emerging |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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