Correlation Between Bondbloxx ETF and IShares Trust

Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF 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 Bondbloxx ETF and IShares Trust 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 Trust , you can compare the effects of market volatilities on Bondbloxx ETF 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 Bondbloxx ETF with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and IShares Trust.

Diversification Opportunities for Bondbloxx ETF and IShares Trust

-0.63

Correlation Coefficient

Bondbloxx ETF  IShares Trust

Excellent diversification

The 3 months correlation between Bondbloxx and IShares is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 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 Bondbloxx ETF i.e., Bondbloxx ETF and IShares Trust go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and IShares Trust

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.1 times more return on investment than IShares Trust. However, Bondbloxx ETF Trust is 10.41 times less risky than IShares Trust. It trades about 0.83 of its potential returns per unit of risk. iShares Trust is currently generating about -0.06 per unit of risk. If you would invest  5,007  in Bondbloxx ETF Trust on September 21, 2024 and sell it today you would earn a total of  19.00  from holding Bondbloxx ETF Trust or generate 0.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  iShares Trust

Bondbloxx ETF Trust

Risk-Adjusted Performance

45 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 45 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Bondbloxx ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bondbloxx ETF and IShares Trust

The main advantage of trading using opposite Bondbloxx ETF and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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.

The idea behind Bondbloxx ETF Trust and iShares Trust 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.