Correlation Between Stellar and BondBloxx ETF

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

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

Diversification Opportunities for Stellar and BondBloxx ETF

-0.49

Correlation Coefficient

Stellar  BondBloxx ETF

Very good diversification

The 3 months correlation between Stellar and BondBloxx is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and Stellar 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 Stellar are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of Stellar i.e., Stellar and BondBloxx ETF go up and down completely randomly.

Pair Corralation between Stellar and BondBloxx ETF

Assuming the 90 days trading horizon Stellar is expected to under-perform the BondBloxx ETF. In addition to that, Stellar is 27.58 times more volatile than BondBloxx ETF Trust. It trades about -0.06 of its total potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.08 per unit of volatility. If you would invest  3,675  in BondBloxx ETF Trust on December 22, 2024 and sell it today you would earn a total of  42.00  from holding BondBloxx ETF Trust or generate 1.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Stellar  vs.  BondBloxx ETF Trust

Stellar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Stellar shareholders.

BondBloxx ETF Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BondBloxx ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stellar and BondBloxx ETF

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

The idea behind Stellar and BondBloxx ETF 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 Transaction History module to view history of all your transactions and understand their impact on performance.