Correlation Between IShares Short and Listed Funds
Can any of the company-specific risk be diversified away by investing in both IShares Short and Listed Funds 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 Short and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Short Treasury and Listed Funds Trust, you can compare the effects of market volatilities on IShares Short and Listed Funds 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 Short with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Short and Listed Funds.
Diversification Opportunities for IShares Short and Listed Funds
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Listed is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Short Treasury and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and IShares Short 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 Short Treasury are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of IShares Short i.e., IShares Short and Listed Funds go up and down completely randomly.
Pair Corralation between IShares Short and Listed Funds
Considering the 90-day investment horizon IShares Short is expected to generate 1.49 times less return on investment than Listed Funds. But when comparing it to its historical volatility, iShares Short Treasury is 7.02 times less risky than Listed Funds. It trades about 1.2 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,242 in Listed Funds Trust on September 1, 2024 and sell it today you would earn a total of 268.00 from holding Listed Funds Trust or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
iShares Short Treasury vs. Listed Funds Trust
Performance |
| Timeline |
| iShares Short Treasury |
| Listed Funds Trust |
IShares Short and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Short and Listed Funds
The main advantage of trading using opposite IShares Short and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Short position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| IShares Short vs. SPDR Bloomberg 1 3 | IShares Short vs. iShares 1 3 Year | IShares Short vs. iShares 3 7 Year | IShares Short vs. iShares 10 20 Year |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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