Correlation Between Bondbloxx ETF and IShares Short

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

Diversification Opportunities for Bondbloxx ETF and IShares Short

0.99

Correlation Coefficient

Bondbloxx ETF  IShares Short

No risk reduction

The 3 months correlation between Bondbloxx and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and iShares Short Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Treasury 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Treasury has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and IShares Short go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and IShares Short

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 1.02 times less return on investment than IShares Short. In addition to that, Bondbloxx ETF is 1.57 times more volatile than iShares Short Treasury. It trades about 0.64 of its total potential returns per unit of risk. iShares Short Treasury is currently generating about 1.03 per unit of volatility. If you would invest  9,976  in iShares Short Treasury on September 26, 2024 and sell it today you would earn a total of  1,023  from holding iShares Short Treasury or generate 10.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  iShares Short Treasury

Bondbloxx ETF Trust

Risk-Adjusted Performance

48 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 48 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares Short Treasury

Risk-Adjusted Performance

86 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Short Treasury are ranked lower than 86 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical indicators, IShares Short is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bondbloxx ETF and IShares Short

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

The idea behind Bondbloxx ETF Trust and iShares Short Treasury 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.