Correlation Between IShares Floating and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Floating and IShares Global 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 Floating and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Floating Rate and iShares Global Infrastructure, you can compare the effects of market volatilities on IShares Floating and IShares Global 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 Floating with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Floating and IShares Global.
Diversification Opportunities for IShares Floating and IShares Global
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Floating Rate and iShares Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Infra and IShares Floating 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 Floating Rate are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Infra has no effect on the direction of IShares Floating i.e., IShares Floating and IShares Global go up and down completely randomly.
Pair Corralation between IShares Floating and IShares Global
Assuming the 90 days trading horizon iShares Floating Rate is expected to generate 0.04 times more return on investment than IShares Global. However, iShares Floating Rate is 24.31 times less risky than IShares Global. It trades about 0.28 of its potential returns per unit of risk. iShares Global Infrastructure is currently generating about -0.11 per unit of risk. If you would invest 1,984 in iShares Floating Rate on December 1, 2024 and sell it today you would earn a total of 18.00 from holding iShares Floating Rate or generate 0.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Floating Rate vs. iShares Global Infrastructure
Performance |
Timeline |
iShares Floating Rate |
iShares Global Infra |
IShares Floating and IShares Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Floating and IShares Global
The main advantage of trading using opposite IShares Floating and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Floating position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.IShares Floating vs. iShares 1 10Yr Laddered | IShares Floating vs. iShares JP Morgan | IShares Floating vs. iShares Convertible Bond | IShares Floating vs. iShares IG Corporate |
IShares Global vs. iShares Global Real | IShares Global vs. iShares Global Monthly | IShares Global vs. iShares Equal Weight | IShares Global vs. iShares Jantzi Social |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |