Correlation Between Bondbloxx ETF and US Treasury
Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and US Treasury 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 US Treasury 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 US Treasury 5, you can compare the effects of market volatilities on Bondbloxx ETF and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and US Treasury.
Diversification Opportunities for Bondbloxx ETF and US Treasury
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bondbloxx and UFIV is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and US Treasury 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 5 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 5 has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and US Treasury go up and down completely randomly.
Pair Corralation between Bondbloxx ETF and US Treasury
Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 1.36 times less return on investment than US Treasury. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 2.4 times less risky than US Treasury. It trades about 0.33 of its potential returns per unit of risk. US Treasury 5 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,788 in US Treasury 5 on September 13, 2024 and sell it today you would earn a total of 38.50 from holding US Treasury 5 or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bondbloxx ETF Trust vs. US Treasury 5
Performance |
| Timeline |
| Bondbloxx ETF Trust |
| US Treasury 5 |
Bondbloxx ETF and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bondbloxx ETF and US Treasury
The main advantage of trading using opposite Bondbloxx ETF and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury'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 |
| US Treasury vs. Global X Funds | US Treasury vs. US Treasury 12 | US Treasury vs. Tidal Trust II | US Treasury vs. Franklin Liberty Treasury |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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