Correlation Between IShares Short and IShares 0
Can any of the company-specific risk be diversified away by investing in both IShares Short and IShares 0 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 Short and IShares 0 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Short Maturity and iShares 0 5 Year, you can compare the effects of market volatilities on IShares Short and IShares 0 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 Short with a short position of IShares 0. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Short and IShares 0.
Diversification Opportunities for IShares Short and IShares 0
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding iShares Short Maturity and iShares 0 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 0 5 and IShares Short 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 Short Maturity are associated (or correlated) with IShares 0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 0 5 has no effect on the direction of IShares Short i.e., IShares Short and IShares 0 go up and down completely randomly.
Pair Corralation between IShares Short and IShares 0
Given the investment horizon of 90 days IShares Short is expected to generate 1.43 times less return on investment than IShares 0. But when comparing it to its historical volatility, iShares Short Maturity is 1.29 times less risky than IShares 0. It trades about 0.1 of its potential returns per unit of risk. iShares 0 5 Year is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,872 in iShares 0 5 Year on January 26, 2024 and sell it today you would earn a total of 331.00 from holding iShares 0 5 Year or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Short Maturity vs. iShares 0 5 Year
Performance |
| Timeline |
| iShares Short Maturity |
| iShares 0 5 |
IShares Short and IShares 0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Short and IShares 0
The main advantage of trading using opposite IShares Short and IShares 0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Short position performs unexpectedly, IShares 0 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 0 will offset losses from the drop in IShares 0's long position.| IShares Short vs. iShares ESG 1 5 | IShares Short vs. First Trust Low | IShares Short vs. First Trust Managed | IShares Short vs. First Trust Senior |
| IShares 0 vs. iShares iBoxx Investment | IShares 0 vs. iShares TIPS Bond | IShares 0 vs. iShares 20 Year | IShares 0 vs. iShares JP Morgan |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |