Correlation Between IShares JP and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both IShares JP and IShares Treasury 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 JP and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and iShares Treasury Bond, you can compare the effects of market volatilities on IShares JP and IShares Treasury 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 JP with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and IShares Treasury.
Diversification Opportunities for IShares JP and IShares Treasury
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and IShares is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and IShares JP 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 JP Morgan are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of IShares JP i.e., IShares JP and IShares Treasury go up and down completely randomly.
Pair Corralation between IShares JP and IShares Treasury
Assuming the 90 days trading horizon iShares JP Morgan is expected to generate 0.43 times more return on investment than IShares Treasury. However, iShares JP Morgan is 2.32 times less risky than IShares Treasury. It trades about 0.04 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about -0.01 per unit of risk. If you would invest 3,185 in iShares JP Morgan on August 26, 2024 and sell it today you would earn a total of 263.00 from holding iShares JP Morgan or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares JP Morgan vs. iShares Treasury Bond
Performance |
| Timeline |
| iShares JP Morgan |
| iShares Treasury Bond |
IShares JP and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and IShares Treasury
The main advantage of trading using opposite IShares JP and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP position performs unexpectedly, IShares Treasury 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 Treasury will offset losses from the drop in IShares Treasury's long position.| IShares JP vs. Leverage Shares 2x | IShares JP vs. WisdomTree Silver 3x | IShares JP vs. Leverage Shares 2x | IShares JP vs. WisdomTree SP 500 |
| IShares Treasury vs. iShares MSCI Japan | IShares Treasury vs. iShares JP Morgan | IShares Treasury vs. iShares MSCI Europe | IShares Treasury vs. iShares Nasdaq Biotechnology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |