Correlation Between SPDR Barclays and IShares Interest
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and IShares Interest 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 SPDR Barclays and IShares Interest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and iShares Interest Rate, you can compare the effects of market volatilities on SPDR Barclays and IShares Interest 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 SPDR Barclays with a short position of IShares Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and IShares Interest.
Diversification Opportunities for SPDR Barclays and IShares Interest
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPDR and IShares is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate and SPDR Barclays 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 SPDR Barclays Intermediate are associated (or correlated) with IShares Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and IShares Interest go up and down completely randomly.
Pair Corralation between SPDR Barclays and IShares Interest
Given the investment horizon of 90 days SPDR Barclays is expected to generate 3.64 times less return on investment than IShares Interest. But when comparing it to its historical volatility, SPDR Barclays Intermediate is 1.15 times less risky than IShares Interest. It trades about 0.03 of its potential returns per unit of risk. iShares Interest Rate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,065 in iShares Interest Rate on January 20, 2024 and sell it today you would earn a total of 376.00 from holding iShares Interest Rate or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Intermediate vs. iShares Interest Rate
Performance |
| Timeline |
| SPDR Barclays Interm |
| iShares Interest Rate |
SPDR Barclays and IShares Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and IShares Interest
The main advantage of trading using opposite SPDR Barclays and IShares Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, IShares Interest 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 Interest will offset losses from the drop in IShares Interest's long position.| SPDR Barclays vs. PrimeEnergy | SPDR Barclays vs. Israel Acquisitions Corp | SPDR Barclays vs. CKX Lands | SPDR Barclays vs. HUMANA INC |
| IShares Interest vs. iShares ESG 1 5 | IShares Interest vs. First Trust Low | IShares Interest vs. First Trust Managed | IShares Interest vs. First Trust Senior |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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