Correlation Between JIB and IShares TIPS
Can any of the company-specific risk be diversified away by investing in both JIB and IShares TIPS 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 JIB and IShares TIPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIB and iShares TIPS Bond, you can compare the effects of market volatilities on JIB and IShares TIPS 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 JIB with a short position of IShares TIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIB and IShares TIPS.
Diversification Opportunities for JIB and IShares TIPS
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JIB and IShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding JIB and iShares TIPS Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares TIPS Bond and JIB 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 JIB are associated (or correlated) with IShares TIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares TIPS Bond has no effect on the direction of JIB i.e., JIB and IShares TIPS go up and down completely randomly.
Pair Corralation between JIB and IShares TIPS
If you would invest 10,473 in iShares TIPS Bond on August 28, 2024 and sell it today you would earn a total of 363.00 from holding iShares TIPS Bond or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
JIB vs. iShares TIPS Bond
Performance |
| Timeline |
| JIB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares TIPS Bond |
JIB and IShares TIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIB and IShares TIPS
The main advantage of trading using opposite JIB and IShares TIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIB position performs unexpectedly, IShares TIPS 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 TIPS will offset losses from the drop in IShares TIPS's long position.| JIB vs. iShares MSCI EAFE | JIB vs. iShares iBoxx Investment | JIB vs. iShares TIPS Bond | JIB vs. iShares 1 3 Year |
| IShares TIPS vs. PIMCO 1 5 Year | IShares TIPS vs. SPDR Bloomberg 1 10 | IShares TIPS vs. FlexShares iBoxx 3 Year |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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