Correlation Between US Treasury and ZSPY
Can any of the company-specific risk be diversified away by investing in both US Treasury and ZSPY 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 US Treasury and ZSPY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 6 and ZSPY, you can compare the effects of market volatilities on US Treasury and ZSPY 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 US Treasury with a short position of ZSPY. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and ZSPY.
Diversification Opportunities for US Treasury and ZSPY
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XBIL and ZSPY is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 6 and ZSPY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZSPY and US Treasury 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 US Treasury 6 are associated (or correlated) with ZSPY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZSPY has no effect on the direction of US Treasury i.e., US Treasury and ZSPY go up and down completely randomly.
Pair Corralation between US Treasury and ZSPY
If you would invest 4,989 in US Treasury 6 on September 14, 2024 and sell it today you would earn a total of 19.00 from holding US Treasury 6 or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
US Treasury 6 vs. ZSPY
Performance |
| Timeline |
| US Treasury 6 |
| ZSPY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Treasury and ZSPY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and ZSPY
The main advantage of trading using opposite US Treasury and ZSPY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, ZSPY 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 ZSPY will offset losses from the drop in ZSPY's long position.| US Treasury vs. iShares Treasury Floating | US Treasury vs. SPDR Bloomberg Investment | US Treasury vs. SPDR Barclays Short | US Treasury vs. SPDR Bloomberg 1 3 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |