Correlation Between IShares 1 and IShares Intermediate
Can any of the company-specific risk be diversified away by investing in both IShares 1 and IShares Intermediate 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 1 and IShares Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 1 3 Year and iShares Intermediate GovernmentCredit, you can compare the effects of market volatilities on IShares 1 and IShares Intermediate 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 1 with a short position of IShares Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and IShares Intermediate.
Diversification Opportunities for IShares 1 and IShares Intermediate
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares 1 3 Year and iShares Intermediate Governmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Intermediate and IShares 1 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 1 3 Year are associated (or correlated) with IShares Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Intermediate has no effect on the direction of IShares 1 i.e., IShares 1 and IShares Intermediate go up and down completely randomly.
Pair Corralation between IShares 1 and IShares Intermediate
Given the investment horizon of 90 days iShares 1 3 Year is expected to under-perform the IShares Intermediate. In addition to that, IShares 1 is 2.12 times more volatile than iShares Intermediate GovernmentCredit. It trades about -0.18 of its total potential returns per unit of risk. iShares Intermediate GovernmentCredit is currently generating about -0.1 per unit of volatility. If you would invest 10,635 in iShares Intermediate GovernmentCredit on September 3, 2024 and sell it today you would lose (91.00) from holding iShares Intermediate GovernmentCredit or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares 1 3 Year vs. iShares Intermediate Governmen
Performance |
| Timeline |
| iShares 1 3 |
| iShares Intermediate |
IShares 1 and IShares Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 1 and IShares Intermediate
The main advantage of trading using opposite IShares 1 and IShares Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 position performs unexpectedly, IShares Intermediate 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 Intermediate will offset losses from the drop in IShares Intermediate's long position.| IShares 1 vs. SPDR Bloomberg International | IShares 1 vs. SPDR FTSE International | IShares 1 vs. iShares International Treasury |
| IShares Intermediate vs. iShares GovernmentCredit Bond | IShares Intermediate vs. iShares Agency Bond | IShares Intermediate vs. iShares New York | IShares Intermediate vs. iShares MBS ETF |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |