Correlation Between FlexShares Credit and BondBloxx ETF
Can any of the company-specific risk be diversified away by investing in both FlexShares Credit and BondBloxx ETF 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 FlexShares Credit and BondBloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares Credit Scored Long and BondBloxx ETF Trust, you can compare the effects of market volatilities on FlexShares Credit and BondBloxx ETF 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 FlexShares Credit with a short position of BondBloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Credit and BondBloxx ETF.
Diversification Opportunities for FlexShares Credit and BondBloxx ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between FlexShares and BondBloxx is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Credit Scored Long and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and FlexShares Credit 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 FlexShares Credit Scored Long are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of FlexShares Credit i.e., FlexShares Credit and BondBloxx ETF go up and down completely randomly.
Pair Corralation between FlexShares Credit and BondBloxx ETF
Given the investment horizon of 90 days FlexShares Credit is expected to generate 1.1 times less return on investment than BondBloxx ETF. In addition to that, FlexShares Credit is 1.21 times more volatile than BondBloxx ETF Trust. It trades about 0.03 of its total potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.04 per unit of volatility. If you would invest 4,780 in BondBloxx ETF Trust on September 1, 2024 and sell it today you would earn a total of 260.00 from holding BondBloxx ETF Trust or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 47.47% |
| Values | Daily Returns |
FlexShares Credit Scored Long vs. BondBloxx ETF Trust
Performance |
| Timeline |
| FlexShares Credit |
| BondBloxx ETF Trust |
FlexShares Credit and BondBloxx ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares Credit and BondBloxx ETF
The main advantage of trading using opposite FlexShares Credit and BondBloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares Credit position performs unexpectedly, BondBloxx ETF 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 BondBloxx ETF will offset losses from the drop in BondBloxx ETF's long position.| FlexShares Credit vs. SPDR Barclays Long | FlexShares Credit vs. FlexShares Credit Scored Corporate | FlexShares Credit vs. FlexShares Disciplined Duration | FlexShares Credit vs. FlexShares Quality Large |
| BondBloxx ETF vs. SPDR Barclays Long | BondBloxx ETF vs. FlexShares Credit Scored Corporate | BondBloxx ETF vs. FlexShares Disciplined Duration | BondBloxx ETF vs. FlexShares Quality Large |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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