Correlation Between IShares 10 and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares 10 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 10 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 10 Year and SPDR Barclays Long, you can compare the effects of market volatilities on IShares 10 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 10 with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 10 and SPDR Barclays.
Diversification Opportunities for IShares 10 and SPDR Barclays
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares 10 Year and SPDR Barclays Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Long 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 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 Long has no effect on the direction of IShares 10 i.e., IShares 10 and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares 10 and SPDR Barclays
Given the investment horizon of 90 days iShares 10 Year is expected to generate 0.86 times more return on investment than SPDR Barclays. However, iShares 10 Year is 1.17 times less risky than SPDR Barclays. It trades about 0.08 of its potential returns per unit of risk. SPDR Barclays Long is currently generating about 0.06 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 | 95.45% |
| Values | Daily Returns |
iShares 10 Year vs. SPDR Barclays Long
Performance |
| Timeline |
| iShares 10 Year |
| SPDR Barclays Long |
IShares 10 and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 10 and SPDR Barclays
The main advantage of trading using opposite IShares 10 and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 10 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 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 |
| SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Barclays Intermediate |
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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