Correlation Between IShares IBoxx and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx and IShares IBonds 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 IBoxx and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx Investment and iShares iBonds 2025, you can compare the effects of market volatilities on IShares IBoxx and IShares IBonds 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 IBoxx with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and IShares IBonds.
Diversification Opportunities for IShares IBoxx and IShares IBonds
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IShares is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment and iShares iBonds 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds 2025 and IShares IBoxx 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 iBoxx Investment are associated (or correlated) with IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds 2025 has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and IShares IBonds go up and down completely randomly.
Pair Corralation between IShares IBoxx and IShares IBonds
Considering the 90-day investment horizon iShares iBoxx Investment is expected to generate 5.98 times more return on investment than IShares IBonds. However, IShares IBoxx is 5.98 times more volatile than iShares iBonds 2025. It trades about 0.07 of its potential returns per unit of risk. iShares iBonds 2025 is currently generating about 0.33 per unit of risk. If you would invest 10,926 in iShares iBoxx Investment on September 12, 2024 and sell it today you would earn a total of 69.00 from holding iShares iBoxx Investment or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx Investment vs. iShares iBonds 2025
Performance |
| Timeline |
| iShares iBoxx Investment |
| iShares iBonds 2025 |
IShares IBoxx and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and IShares IBonds
The main advantage of trading using opposite IShares IBoxx and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx position performs unexpectedly, IShares IBonds 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 IBonds will offset losses from the drop in IShares IBonds' long position.| IShares IBoxx vs. American Century STOXX | IShares IBoxx vs. Franklin Liberty Investment | IShares IBoxx vs. Aquagold International | IShares IBoxx vs. Morningstar Unconstrained Allocation |
| IShares IBonds vs. Rivernorth Opportunistic Municipalome | IShares IBonds vs. MFS Investment Grade | IShares IBonds vs. Blackrock Muniholdings Ny | IShares IBonds vs. Blackrock Muniholdings Closed |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |