Correlation Between IShares Trust and Bondbloxx ETF

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

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

Diversification Opportunities for IShares Trust and Bondbloxx ETF

-0.63

Correlation Coefficient

IShares Trust  Bondbloxx ETF

Excellent diversification

The 3 months correlation between IShares and Bondbloxx is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust and IShares Trust 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 Trust are associated (or correlated) with Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of IShares Trust i.e., IShares Trust and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between IShares Trust and Bondbloxx ETF

Given the investment horizon of 90 days iShares Trust is expected to under-perform the Bondbloxx ETF. In addition to that, IShares Trust is 13.63 times more volatile than Bondbloxx ETF Trust. It trades about -0.13 of its total potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about 0.58 per unit of volatility. If you would invest  4,982  in Bondbloxx ETF Trust on September 21, 2024 and sell it today you would earn a total of  44.00  from holding Bondbloxx ETF Trust or generate 0.88% return on investment over 90 days.

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

iShares Trust   vs.  Bondbloxx ETF Trust

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bondbloxx ETF Trust

Risk-Adjusted Performance

45 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 45 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Bondbloxx ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IShares Trust and Bondbloxx ETF

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

The idea behind iShares Trust and Bondbloxx 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.