Correlation Between IShares Floating and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Floating and IShares Global 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 Floating and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Floating Rate and iShares Global Real, you can compare the effects of market volatilities on IShares Floating and IShares Global 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 Floating with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Floating and IShares Global.
Diversification Opportunities for IShares Floating and IShares Global
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding iShares Floating Rate and iShares Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Real and IShares Floating 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 Floating Rate are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Real has no effect on the direction of IShares Floating i.e., IShares Floating and IShares Global go up and down completely randomly.
Pair Corralation between IShares Floating and IShares Global
Assuming the 90 days trading horizon IShares Floating is expected to generate 1.65 times less return on investment than IShares Global. But when comparing it to its historical volatility, iShares Floating Rate is 18.36 times less risky than IShares Global. It trades about 0.4 of its potential returns per unit of risk. iShares Global Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,190 in iShares Global Real on August 29, 2024 and sell it today you would earn a total of 29.00 from holding iShares Global Real or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Floating Rate vs. iShares Global Real
Performance |
| Timeline |
| iShares Floating Rate |
| iShares Global Real |
IShares Floating and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Floating and IShares Global
The main advantage of trading using opposite IShares Floating and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Floating position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| IShares Floating vs. iShares Canadian Short | IShares Floating vs. iShares Core Canadian | IShares Floating vs. BMO Short Corporate | IShares Floating vs. Vanguard Canadian Short |
| IShares Global vs. iShares Global Infrastructure | IShares Global vs. iShares Global Monthly | IShares Global vs. iShares 1 5 Year | IShares Global vs. iShares Equal Weight |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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