Correlation Between IShares Treasury and ETF Managers

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

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

Diversification Opportunities for IShares Treasury and ETF Managers

0.87

Correlation Coefficient

IShares Treasury  ETF Managers

Very poor diversification

The 3 months correlation between IShares and ETF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Floating and ETF Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Managers Group and IShares Treasury 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 Treasury Floating are associated (or correlated) with ETF Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Managers Group has no effect on the direction of IShares Treasury i.e., IShares Treasury and ETF Managers go up and down completely randomly.

Pair Corralation between IShares Treasury and ETF Managers

If you would invest  4,994  in iShares Treasury Floating on September 16, 2024 and sell it today you would earn a total of  61.00  from holding iShares Treasury Floating or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.54%
Values	Daily Returns

iShares Treasury Floating  vs.  ETF Managers Group

iShares Treasury Floating

Risk-Adjusted Performance

85 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Treasury Floating are ranked lower than 85 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, IShares Treasury is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ETF Managers Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETF Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, ETF Managers is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Treasury and ETF Managers

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

The idea behind iShares Treasury Floating and ETF Managers Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.