Correlation Between IShares Broad and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Broad and IShares Trust 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 Broad and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Broad USD and iShares Trust , you can compare the effects of market volatilities on IShares Broad and IShares Trust 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 Broad with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and IShares Trust.
Diversification Opportunities for IShares Broad and IShares Trust
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad USD and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and IShares Broad 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 Broad USD are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares Broad i.e., IShares Broad and IShares Trust go up and down completely randomly.
Pair Corralation between IShares Broad and IShares Trust
Given the investment horizon of 90 days iShares Broad USD is expected to generate 0.82 times more return on investment than IShares Trust. However, iShares Broad USD is 1.23 times less risky than IShares Trust. It trades about 0.11 of its potential returns per unit of risk. iShares Trust is currently generating about 0.04 per unit of risk. If you would invest 3,683 in iShares Broad USD on December 1, 2024 and sell it today you would earn a total of 62.00 from holding iShares Broad USD or generate 1.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Broad USD vs. iShares Trust
Performance |
Timeline |
iShares Broad USD |
iShares Trust |
IShares Broad and IShares Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Broad and IShares Trust
The main advantage of trading using opposite IShares Broad and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.IShares Broad vs. Xtrackers USD High | IShares Broad vs. iShares 0 5 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. Global X Preferred |
IShares Trust vs. BondBloxx ETF Trust | IShares Trust vs. Virtus ETF Trust | IShares Trust vs. Virtus ETF Trust | IShares Trust vs. WisdomTree Emerging Markets |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |