Correlation Between MYMG and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both MYMG 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 MYMG and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYMG and iShares iBonds Dec, you can compare the effects of market volatilities on MYMG 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 MYMG with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYMG and IShares IBonds.
Diversification Opportunities for MYMG and IShares IBonds
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MYMG and IShares is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MYMG and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec and MYMG 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 MYMG 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 Dec has no effect on the direction of MYMG i.e., MYMG and IShares IBonds go up and down completely randomly.
Pair Corralation between MYMG and IShares IBonds
Given the investment horizon of 90 days MYMG is expected to generate 3.71 times more return on investment than IShares IBonds. However, MYMG is 3.71 times more volatile than iShares iBonds Dec. It trades about 0.23 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.33 per unit of risk. If you would invest 2,480 in MYMG on September 1, 2024 and sell it today you would earn a total of 24.00 from holding MYMG or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYMG vs. iShares iBonds Dec
Performance |
| Timeline |
| MYMG |
| iShares iBonds Dec |
MYMG and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYMG and IShares IBonds
The main advantage of trading using opposite MYMG and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYMG 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.The idea behind MYMG and iShares iBonds Dec pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares Trust | IShares IBonds vs. iShares iBonds Dec |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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