Correlation Between Bondbloxx ETF and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and Aozora Bank 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 Bondbloxx ETF and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bondbloxx ETF Trust and Aozora Bank Ltd, you can compare the effects of market volatilities on Bondbloxx ETF and Aozora Bank 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 Bondbloxx ETF with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Aozora Bank.
Diversification Opportunities for Bondbloxx ETF and Aozora Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bondbloxx and Aozora is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Aozora Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Aozora Bank go up and down completely randomly.
Pair Corralation between Bondbloxx ETF and Aozora Bank
Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.08 times more return on investment than Aozora Bank. However, Bondbloxx ETF Trust is 13.31 times less risky than Aozora Bank. It trades about 0.1 of its potential returns per unit of risk. Aozora Bank Ltd is currently generating about 0.01 per unit of risk. If you would invest 4,554 in Bondbloxx ETF Trust on September 13, 2024 and sell it today you would earn a total of 368.00 from holding Bondbloxx ETF Trust or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bondbloxx ETF Trust vs. Aozora Bank Ltd
Performance |
| Timeline |
| Bondbloxx ETF Trust |
| Aozora Bank |
Bondbloxx ETF and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bondbloxx ETF and Aozora Bank
The main advantage of trading using opposite Bondbloxx ETF and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust |
| Aozora Bank vs. PT Bank Rakyat | Aozora Bank vs. Morningstar Unconstrained Allocation | Aozora Bank vs. Bondbloxx ETF Trust | Aozora Bank vs. Spring Valley Acquisition |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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