Correlation Between IShares Aaa and FlexShares Credit
Can any of the company-specific risk be diversified away by investing in both IShares Aaa and FlexShares Credit 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 Aaa and FlexShares Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Aaa and FlexShares Credit Scored Corporate, you can compare the effects of market volatilities on IShares Aaa and FlexShares Credit 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 Aaa with a short position of FlexShares Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Aaa and FlexShares Credit.
Diversification Opportunities for IShares Aaa and FlexShares Credit
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and FlexShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Aaa and FlexShares Credit Scored Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Credit and IShares Aaa 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 Aaa are associated (or correlated) with FlexShares Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Credit has no effect on the direction of IShares Aaa i.e., IShares Aaa and FlexShares Credit go up and down completely randomly.
Pair Corralation between IShares Aaa and FlexShares Credit
Given the investment horizon of 90 days iShares Aaa is expected to under-perform the FlexShares Credit. In addition to that, IShares Aaa is 1.39 times more volatile than FlexShares Credit Scored Corporate. It trades about -0.01 of its total potential returns per unit of risk. FlexShares Credit Scored Corporate is currently generating about 0.05 per unit of volatility. If you would invest 4,711 in FlexShares Credit Scored Corporate on February 7, 2024 and sell it today you would earn a total of 17.00 from holding FlexShares Credit Scored Corporate or generate 0.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Aaa vs. FlexShares Credit Scored Corpo
Performance |
Timeline |
iShares Aaa |
FlexShares Credit |
IShares Aaa and FlexShares Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Aaa and FlexShares Credit
The main advantage of trading using opposite IShares Aaa and FlexShares Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Aaa position performs unexpectedly, FlexShares Credit 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 FlexShares Credit will offset losses from the drop in FlexShares Credit's long position.IShares Aaa vs. VanEck Vectors Moodys | IShares Aaa vs. Xtrackers California Municipal | IShares Aaa vs. Vanguard ESG Corporate | IShares Aaa vs. Vanguard Intermediate Term Corporate |
FlexShares Credit vs. iShares ESG USD | FlexShares Credit vs. FlexShares Disciplined Duration | FlexShares Credit vs. iShares ESG 1 5 | FlexShares Credit vs. First Trust Emerging |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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