Correlation Between IShares SP and Abrdn Bloomberg

Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP GSCI and abrdn Bloomberg All, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of Abrdn Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Abrdn Bloomberg.

Diversification Opportunities for IShares SP and Abrdn Bloomberg

0.9

Correlation Coefficient

IShares SP  Abrdn Bloomberg

Almost no diversification

The 3 months correlation between IShares and Abrdn is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP GSCI 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 SP 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 SP GSCI 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 SP i.e., IShares SP and Abrdn Bloomberg go up and down completely randomly.

Pair Corralation between IShares SP and Abrdn Bloomberg

Considering the 90-day investment horizon iShares SP GSCI is expected to under-perform the Abrdn Bloomberg. In addition to that, IShares SP is 1.35 times more volatile than abrdn Bloomberg All. It trades about -0.01 of its total potential returns per unit of risk. abrdn Bloomberg All is currently generating about 0.27 per unit of volatility. If you would invest  3,247  in abrdn Bloomberg All on November 28, 2024 and sell it today you would earn a total of  103.00  from holding abrdn Bloomberg All or generate 3.17% return on investment over 90 days.

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

iShares SP GSCI  vs.  abrdn Bloomberg All

iShares SP GSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP GSCI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, IShares SP may actually be approaching a critical reversion point that can send shares even higher in March 2025.

abrdn Bloomberg All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Bloomberg All are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Abrdn Bloomberg may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with IShares SP and Abrdn Bloomberg

The main advantage of trading using opposite IShares SP and Abrdn Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP GSCI 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.