Correlation Between IShares US and Abrdn Bloomberg

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Can any of the company-specific risk be diversified away by investing in both IShares US and Abrdn Bloomberg 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 US and Abrdn Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares US Treasury and Abrdn Bloomberg All, you can compare the effects of market volatilities on IShares US and Abrdn Bloomberg 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 US with a short position of Abrdn Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares US and Abrdn Bloomberg.

Diversification Opportunities for IShares US and Abrdn Bloomberg

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between IShares and Abrdn is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding IShares US Treasury and Abrdn Bloomberg All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Bloomberg All and IShares US 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 US Treasury are associated (or correlated) with Abrdn Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Bloomberg All has no effect on the direction of IShares US i.e., IShares US and Abrdn Bloomberg go up and down completely randomly.

Pair Corralation between IShares US and Abrdn Bloomberg

Given the investment horizon of 90 days IShares US Treasury is expected to generate 0.5 times more return on investment than Abrdn Bloomberg. However, IShares US Treasury is 1.99 times less risky than Abrdn Bloomberg. It trades about 0.0 of its potential returns per unit of risk. Abrdn Bloomberg All is currently generating about 0.0 per unit of risk. If you would invest  2,291  in IShares US Treasury on December 30, 2023 and sell it today you would lose (14.00) from holding IShares US Treasury or give up 0.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

IShares US Treasury  vs.  Abrdn Bloomberg All

 Performance 
       Timeline  
IShares US Treasury 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days IShares US Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares US is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
Abrdn Bloomberg All 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Abrdn Bloomberg All are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Abrdn Bloomberg is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

IShares US and Abrdn Bloomberg Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares US and Abrdn Bloomberg

The main advantage of trading using opposite IShares US and Abrdn Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares US position performs unexpectedly, Abrdn Bloomberg 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 Abrdn Bloomberg will offset losses from the drop in Abrdn Bloomberg's long position.
The idea behind IShares US Treasury and Abrdn Bloomberg All pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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