Correlation Between IShares Fixed and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both IShares Fixed and SPDR DoubleLine 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 Fixed and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Fixed Income and SPDR DoubleLine Short, you can compare the effects of market volatilities on IShares Fixed and SPDR DoubleLine 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 Fixed with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fixed and SPDR DoubleLine.
Diversification Opportunities for IShares Fixed and SPDR DoubleLine
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and SPDR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fixed Income and SPDR DoubleLine Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Short and IShares Fixed 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 Fixed Income are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Short has no effect on the direction of IShares Fixed i.e., IShares Fixed and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between IShares Fixed and SPDR DoubleLine
Given the investment horizon of 90 days iShares Fixed Income is expected to under-perform the SPDR DoubleLine. In addition to that, IShares Fixed is 2.48 times more volatile than SPDR DoubleLine Short. It trades about -0.27 of its total potential returns per unit of risk. SPDR DoubleLine Short is currently generating about -0.16 per unit of volatility. If you would invest 4,681 in SPDR DoubleLine Short on January 20, 2024 and sell it today you would lose (15.00) from holding SPDR DoubleLine Short or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Fixed Income vs. SPDR DoubleLine Short
Performance |
| Timeline |
| iShares Fixed me |
| SPDR DoubleLine Short |
IShares Fixed and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Fixed and SPDR DoubleLine
The main advantage of trading using opposite IShares Fixed and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Fixed position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| IShares Fixed vs. SPDR SSGA Sector | IShares Fixed vs. SPDR DoubleLine Emerging | IShares Fixed vs. SPDR DoubleLine Short | IShares Fixed vs. SPDR SSgA Ultra |
| SPDR DoubleLine vs. Vanguard Intermediate Term Bond | SPDR DoubleLine vs. Vanguard Long Term Bond | SPDR DoubleLine vs. Vanguard Total Bond | SPDR DoubleLine vs. Vanguard Intermediate Term Corporate |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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