Correlation Between SPDR Barclays and IShares Core
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and IShares Core 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 SPDR Barclays and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Long and iShares Core 10, you can compare the effects of market volatilities on SPDR Barclays and IShares Core 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 SPDR Barclays with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and IShares Core.
Diversification Opportunities for SPDR Barclays and IShares Core
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and iShares Core 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core 10 and SPDR Barclays 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 SPDR Barclays Long are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core 10 has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and IShares Core go up and down completely randomly.
Pair Corralation between SPDR Barclays and IShares Core
Given the investment horizon of 90 days SPDR Barclays Long is expected to generate 0.93 times more return on investment than IShares Core. However, SPDR Barclays Long is 1.07 times less risky than IShares Core. It trades about 0.05 of its potential returns per unit of risk. iShares Core 10 is currently generating about 0.04 per unit of risk. If you would invest 2,119 in SPDR Barclays Long on August 24, 2024 and sell it today you would earn a total of 160.00 from holding SPDR Barclays Long or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
SPDR Barclays Long vs. iShares Core 10
Performance |
| Timeline |
| SPDR Barclays Long |
| iShares Core 10 |
SPDR Barclays and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and IShares Core
The main advantage of trading using opposite SPDR Barclays and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| SPDR Barclays vs. iShares 10 Year | SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. FlexShares Credit Scored Long |
| IShares Core vs. iShares Core 1 5 | IShares Core vs. iShares Agency Bond | IShares Core vs. iShares Intermediate GovernmentCredit | IShares Core vs. iShares GNMA Bond |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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