Correlation Between IShares Broad and Nushares ETF
Can any of the company-specific risk be diversified away by investing in both IShares Broad and Nushares ETF 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 Broad and Nushares ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Broad USD and Nushares ETF Trust, you can compare the effects of market volatilities on IShares Broad and Nushares ETF 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 Broad with a short position of Nushares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and Nushares ETF.
Diversification Opportunities for IShares Broad and Nushares ETF
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Nushares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad USD and Nushares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nushares ETF Trust and IShares Broad 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 Broad USD are associated (or correlated) with Nushares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nushares ETF Trust has no effect on the direction of IShares Broad i.e., IShares Broad and Nushares ETF go up and down completely randomly.
Pair Corralation between IShares Broad and Nushares ETF
Given the investment horizon of 90 days IShares Broad is expected to generate 3.62 times less return on investment than Nushares ETF. But when comparing it to its historical volatility, iShares Broad USD is 1.75 times less risky than Nushares ETF. It trades about 0.16 of its potential returns per unit of risk. Nushares ETF Trust is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,927 in Nushares ETF Trust on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Nushares ETF Trust or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Broad USD vs. Nushares ETF Trust
Performance |
| Timeline |
| iShares Broad USD |
| Nushares ETF Trust |
IShares Broad and Nushares ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Broad and Nushares ETF
The main advantage of trading using opposite IShares Broad and Nushares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad position performs unexpectedly, Nushares ETF 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 Nushares ETF will offset losses from the drop in Nushares ETF's long position.| IShares Broad vs. iShares 5 10 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. iShares 1 5 Year | IShares Broad vs. iShares 0 5 Year |
| Nushares ETF vs. iShares Core SP | Nushares ETF vs. iShares Core MSCI | Nushares ETF vs. iShares Broad USD | Nushares ETF vs. iShares Core SP |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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