Correlation Between Bondbloxx ETF and IShares JP

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

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

Diversification Opportunities for Bondbloxx ETF and IShares JP

0.57

Correlation Coefficient

Bondbloxx ETF  IShares JP

Very weak diversification

The 3 months correlation between Bondbloxx and IShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and IShares JP go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and IShares JP

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.71 times more return on investment than IShares JP. However, Bondbloxx ETF Trust is 1.42 times less risky than IShares JP. It trades about 0.1 of its potential returns per unit of risk. iShares JP Morgan is currently generating about 0.06 per unit of risk. If you would invest  3,502  in Bondbloxx ETF Trust on September 19, 2024 and sell it today you would earn a total of  725.00  from holding Bondbloxx ETF Trust or generate 20.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  iShares JP Morgan

Bondbloxx ETF Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares JP Morgan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares JP Morgan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, IShares JP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and IShares JP

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

The idea behind Bondbloxx ETF Trust and iShares JP Morgan 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.