Correlation Between Barclays Capital and IShares GSCI

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

By analyzing existing cross correlation between Barclays Capital and iShares GSCI Commodity, you can compare the effects of market volatilities on Barclays Capital and IShares GSCI 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 Barclays Capital with a short position of IShares GSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and IShares GSCI.

Diversification Opportunities for Barclays Capital and IShares GSCI

-0.37

Correlation Coefficient

Barclays Capital  IShares GSCI

Very good diversification

The 3 months correlation between Barclays and IShares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and iShares GSCI Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares GSCI Commodity and Barclays Capital 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 Barclays Capital are associated (or correlated) with IShares GSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares GSCI Commodity has no effect on the direction of Barclays Capital i.e., Barclays Capital and IShares GSCI go up and down completely randomly.

Pair Corralation between Barclays Capital and IShares GSCI

If you would invest  2,716  in iShares GSCI Commodity on January 29, 2024 and sell it today you would earn a total of  66.00  from holding iShares GSCI Commodity or generate 2.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Barclays Capital  vs.  iShares GSCI Commodity

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Barclays Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

iShares GSCI Commodity

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares GSCI Commodity are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady primary indicators, IShares GSCI may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Barclays Capital and IShares GSCI

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

The idea behind Barclays Capital and iShares GSCI Commodity 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..