Correlation Between IShares 20 and Bunge
Can any of the company-specific risk be diversified away by investing in both IShares 20 and Bunge 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 20 and Bunge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares 20 Year and Bunge Limited, you can compare the effects of market volatilities on IShares 20 and Bunge 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 20 with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 20 and Bunge.
Diversification Opportunities for IShares 20 and Bunge
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Bunge is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IShares 20 Year and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and IShares 20 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 20 Year are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of IShares 20 i.e., IShares 20 and Bunge go up and down completely randomly.
Pair Corralation between IShares 20 and Bunge
Considering the 90-day investment horizon IShares 20 Year is expected to under-perform the Bunge. But the etf apears to be less risky and, when comparing its historical volatility, IShares 20 Year is 1.63 times less risky than Bunge. The etf trades about -0.03 of its potential returns per unit of risk. The Bunge Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11,249 in Bunge Limited on December 29, 2023 and sell it today you would lose (1,007) from holding Bunge Limited or give up 8.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
IShares 20 Year vs. Bunge Limited
Performance |
Timeline |
IShares 20 Year |
Bunge Limited |
IShares 20 and Bunge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares 20 and Bunge
The main advantage of trading using opposite IShares 20 and Bunge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 20 position performs unexpectedly, Bunge 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 Bunge will offset losses from the drop in Bunge's long position.IShares 20 vs. US Treasury 12 | IShares 20 vs. Tidal Trust II | IShares 20 vs. Franklin Liberty US | IShares 20 vs. SPDR Bloomberg 1 3 |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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