Correlation Between IShares Floating and IShares Conservative

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both IShares Floating and IShares Conservative 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 Conservative 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 Conservative Short, you can compare the effects of market volatilities on IShares Floating and IShares Conservative 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 Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Floating and IShares Conservative.

Diversification Opportunities for IShares Floating and IShares Conservative

ISharesISharesDiversified AwayISharesISharesDiversified Away100%
0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IShares and IShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares Floating Rate and iShares Conservative Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Conservative 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 Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Conservative has no effect on the direction of IShares Floating i.e., IShares Floating and IShares Conservative go up and down completely randomly.

Pair Corralation between IShares Floating and IShares Conservative

Assuming the 90 days trading horizon IShares Floating is expected to generate 1.19 times less return on investment than IShares Conservative. But when comparing it to its historical volatility, iShares Floating Rate is 4.47 times less risky than IShares Conservative. It trades about 0.32 of its potential returns per unit of risk. iShares Conservative Short is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,774  in iShares Conservative Short on November 22, 2024 and sell it today you would earn a total of  21.00  from holding iShares Conservative Short or generate 1.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

iShares Floating Rate  vs.  iShares Conservative Short

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0.00.51.01.5
JavaScript chart by amCharts 3.21.15XFR XSC
       Timeline  
iShares Floating Rate 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Floating Rate are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Floating is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb19.919.952020.05
iShares Conservative 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Conservative Short are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, IShares Conservative is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb17.717.7517.817.8517.917.9518

IShares Floating and IShares Conservative Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.0863-0.0671-0.0478-0.0286-0.0093170.01130.0340.05730.08070.15 20406080100120140
JavaScript chart by amCharts 3.21.15XFR XSC
       Returns  

Pair Trading with IShares Floating and IShares Conservative

The main advantage of trading using opposite IShares Floating and IShares Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Floating position performs unexpectedly, IShares Conservative 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 Conservative will offset losses from the drop in IShares Conservative's long position.
The idea behind iShares Floating Rate and iShares Conservative Short 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Global Correlations
Find global opportunities by holding instruments from different markets
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world