Correlation Between IShares Inflation and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both IShares Inflation 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 Inflation 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 Inflation Hedged and SPDR Bloomberg Investment, you can compare the effects of market volatilities on IShares Inflation 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 Inflation with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Inflation and SPDR Bloomberg.
Diversification Opportunities for IShares Inflation and SPDR Bloomberg
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and SPDR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding iShares Inflation Hedged 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 Inflation 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 Inflation Hedged 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 Inflation i.e., IShares Inflation and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between IShares Inflation and SPDR Bloomberg
Given the investment horizon of 90 days IShares Inflation is expected to generate 1.47 times less return on investment than SPDR Bloomberg. In addition to that, IShares Inflation is 7.34 times more volatile than SPDR Bloomberg Investment. It trades about 0.04 of its total potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.43 per unit of volatility. If you would invest 3,039 in SPDR Bloomberg Investment on September 2, 2024 and sell it today you would earn a total of 43.00 from holding SPDR Bloomberg Investment or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Inflation Hedged vs. SPDR Bloomberg Investment
Performance |
| Timeline |
| iShares Inflation Hedged |
| SPDR Bloomberg Investment |
IShares Inflation and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Inflation and SPDR Bloomberg
The main advantage of trading using opposite IShares Inflation and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Inflation 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 Inflation vs. iShares Interest Rate | IShares Inflation vs. iShares Interest Rate | IShares Inflation vs. iShares Edge Investment | IShares Inflation vs. iShares Interest Rate |
| SPDR Bloomberg vs. iShares Floating Rate | SPDR Bloomberg vs. VanEck Investment Grade | SPDR Bloomberg vs. SPDR Blackstone Senior | SPDR Bloomberg vs. Invesco Ultra Short |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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