Correlation Between IShares International and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both IShares International and SPDR Bloomberg 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 International and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares International Treasury and SPDR Bloomberg Short, you can compare the effects of market volatilities on IShares International and SPDR Bloomberg 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 International with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares International and SPDR Bloomberg.
Diversification Opportunities for IShares International and SPDR Bloomberg
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Treasury and SPDR Bloomberg Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Short and IShares International 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 International Treasury are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Short has no effect on the direction of IShares International i.e., IShares International and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between IShares International and SPDR Bloomberg
Given the investment horizon of 90 days iShares International Treasury is expected to generate 1.24 times more return on investment than SPDR Bloomberg. However, IShares International is 1.24 times more volatile than SPDR Bloomberg Short. It trades about 0.0 of its potential returns per unit of risk. SPDR Bloomberg Short is currently generating about -0.01 per unit of risk. If you would invest 3,937 in iShares International Treasury on August 24, 2024 and sell it today you would lose (13.00) from holding iShares International Treasury or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares International Treasury vs. SPDR Bloomberg Short
Performance |
| Timeline |
| iShares International |
| SPDR Bloomberg Short |
IShares International and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares International and SPDR Bloomberg
The main advantage of trading using opposite IShares International and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares International position performs unexpectedly, SPDR Bloomberg 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 Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| IShares International vs. Invesco Fundamental Investment | IShares International vs. iShares International High | IShares International vs. VanEck International High |
| SPDR Bloomberg vs. Invesco Fundamental Investment | SPDR Bloomberg vs. iShares International High | SPDR Bloomberg vs. VanEck International High |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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