Correlation Between IShares Core and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR DoubleLine 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 Core and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Total and SPDR DoubleLine Total, you can compare the effects of market volatilities on IShares Core and SPDR DoubleLine 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 Core with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR DoubleLine.
Diversification Opportunities for IShares Core and SPDR DoubleLine
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 Core Total and SPDR DoubleLine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Total and IShares Core 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 Core Total are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Total has no effect on the direction of IShares Core i.e., IShares Core and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between IShares Core and SPDR DoubleLine
Given the investment horizon of 90 days iShares Core Total is expected to under-perform the SPDR DoubleLine. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core Total is 1.01 times less risky than SPDR DoubleLine. The etf trades about -0.06 of its potential returns per unit of risk. The SPDR DoubleLine Total is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,004 in SPDR DoubleLine Total on August 24, 2024 and sell it today you would lose (15.00) from holding SPDR DoubleLine Total or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Total vs. SPDR DoubleLine Total
Performance |
| Timeline |
| iShares Core Total |
| SPDR DoubleLine Total |
IShares Core and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SPDR DoubleLine
The main advantage of trading using opposite IShares Core and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR DoubleLine 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 DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| IShares Core vs. Fidelity Total Bond | IShares Core vs. Hartford Total Return | IShares Core vs. JPMorgan Core Plus | IShares Core vs. Vident Core Bond |
| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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