Correlation Between IShares IBonds and Columbia ETF

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

By analyzing existing cross correlation between iShares iBonds 2025 and Columbia ETF Trust, you can compare the effects of market volatilities on IShares IBonds and Columbia ETF 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 IBonds with a short position of Columbia ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and Columbia ETF.

Diversification Opportunities for IShares IBonds and Columbia ETF

0.0

Correlation Coefficient

IShares IBonds  Columbia ETF

Pay attention - limited upside

The 3 months correlation between IShares and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds 2025 and Columbia ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia ETF Trust and IShares IBonds 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 iBonds 2025 are associated (or correlated) with Columbia ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia ETF Trust has no effect on the direction of IShares IBonds i.e., IShares IBonds and Columbia ETF go up and down completely randomly.

Pair Corralation between IShares IBonds and Columbia ETF

If you would invest  2,314  in iShares iBonds 2025 on October 22, 2024 and sell it today you would earn a total of  7.00  from holding iShares iBonds 2025 or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

iShares iBonds 2025  vs.  Columbia ETF Trust

iShares iBonds 2025

Risk-Adjusted Performance

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Solid

Over the last 90 days iShares iBonds 2025 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, IShares IBonds is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Columbia ETF Trust

Risk-Adjusted Performance

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OK

Over the last 90 days Columbia ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Columbia ETF is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares IBonds and Columbia ETF

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

The idea behind iShares iBonds 2025 and Columbia ETF Trust 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 Transaction History module to view history of all your transactions and understand their impact on performance.