Correlation Between IShares Interest and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both IShares Interest and SPDR Bloomberg 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 Interest and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Interest Rate and SPDR Bloomberg Investment, you can compare the effects of market volatilities on IShares Interest and SPDR Bloomberg 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 Interest with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Interest and SPDR Bloomberg.
Diversification Opportunities for IShares Interest and SPDR Bloomberg
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Interest Rate and SPDR Bloomberg Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Investment and IShares Interest 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 Interest Rate are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Investment has no effect on the direction of IShares Interest i.e., IShares Interest and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between IShares Interest and SPDR Bloomberg
Given the investment horizon of 90 days iShares Interest Rate is expected to generate 4.35 times more return on investment than SPDR Bloomberg. However, IShares Interest is 4.35 times more volatile than SPDR Bloomberg Investment. It trades about 0.21 of its potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.49 per unit of risk. If you would invest 9,265 in iShares Interest Rate on August 31, 2024 and sell it today you would earn a total of 80.00 from holding iShares Interest Rate or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Interest Rate vs. SPDR Bloomberg Investment
Performance |
| Timeline |
| iShares Interest Rate |
| SPDR Bloomberg Investment |
IShares Interest and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Interest and SPDR Bloomberg
The main advantage of trading using opposite IShares Interest and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Interest position performs unexpectedly, SPDR Bloomberg 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 Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Inflation Hedged | IShares Interest vs. ProShares Investment GradeInterest |
| SPDR Bloomberg vs. iShares Interest Rate | SPDR Bloomberg vs. iShares Interest Rate | SPDR Bloomberg vs. iShares Edge Investment | SPDR Bloomberg vs. iShares Inflation Hedged |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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