Correlation Between SPDR Bloomberg and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and IShares Treasury 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 SPDR Bloomberg and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Barclays and iShares Treasury Bond, you can compare the effects of market volatilities on SPDR Bloomberg and IShares Treasury 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 SPDR Bloomberg with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and IShares Treasury.
Diversification Opportunities for SPDR Bloomberg and IShares Treasury
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and SPDR Bloomberg 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 SPDR Bloomberg Barclays are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and IShares Treasury go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and IShares Treasury
Considering the 90-day investment horizon SPDR Bloomberg Barclays is expected to generate 0.89 times more return on investment than IShares Treasury. However, SPDR Bloomberg Barclays is 1.13 times less risky than IShares Treasury. It trades about 0.09 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about 0.07 per unit of risk. If you would invest 2,718 in SPDR Bloomberg Barclays on August 24, 2024 and sell it today you would earn a total of 93.00 from holding SPDR Bloomberg Barclays or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Barclays vs. iShares Treasury Bond
Performance |
| Timeline |
| SPDR Bloomberg Barclays |
| iShares Treasury Bond |
SPDR Bloomberg and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and IShares Treasury
The main advantage of trading using opposite SPDR Bloomberg and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, IShares Treasury 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 Treasury will offset losses from the drop in IShares Treasury's long position.| SPDR Bloomberg vs. SPDR STOXX Europe | SPDR Bloomberg vs. SPDR Kensho Future | SPDR Bloomberg vs. SPDR Kensho Intelligent | SPDR Bloomberg vs. SPDR SP Kensho |
| IShares Treasury vs. SPDR Barclays Short | IShares Treasury vs. SPDR Barclays Long | IShares Treasury vs. SPDR Portfolio Mortgage | IShares Treasury 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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