Correlation Between BlackRock ETF and IShares

Can any of the company-specific risk be diversified away by investing in both BlackRock ETF and IShares 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 BlackRock ETF and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock ETF Trust and IShares, you can compare the effects of market volatilities on BlackRock ETF and IShares 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 BlackRock ETF with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ETF and IShares.

Diversification Opportunities for BlackRock ETF and IShares

0.68

Correlation Coefficient

BlackRock ETF  IShares

Poor diversification

The 3 months correlation between BlackRock and IShares is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ETF Trust and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and BlackRock 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 BlackRock ETF Trust are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of BlackRock ETF i.e., BlackRock ETF and IShares go up and down completely randomly.

Pair Corralation between BlackRock ETF and IShares

If you would invest  2,922  in IShares on October 27, 2024 and sell it today you would earn a total of  0.00  from holding IShares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BlackRock ETF Trust  vs.  IShares

BlackRock ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, BlackRock ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IShares is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BlackRock ETF and IShares

The main advantage of trading using opposite BlackRock ETF and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ETF position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.

The idea behind BlackRock ETF Trust and IShares 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.