Correlation Between IShares VII and ISh IBds

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

By analyzing existing cross correlation between iShares VII PLC and iSh iBds Dec27, you can compare the effects of market volatilities on IShares VII and ISh IBds 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 VII with a short position of ISh IBds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and ISh IBds.

Diversification Opportunities for IShares VII and ISh IBds

0.92

Correlation Coefficient

IShares VII  ISh IBds

Almost no diversification

The 3 months correlation between IShares and ISh is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and iSh iBds Dec27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSh iBds Dec27 and IShares VII 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 VII PLC are associated (or correlated) with ISh IBds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSh iBds Dec27 has no effect on the direction of IShares VII i.e., IShares VII and ISh IBds go up and down completely randomly.

Pair Corralation between IShares VII and ISh IBds

Assuming the 90 days trading horizon iShares VII PLC is expected to generate 13.72 times more return on investment than ISh IBds. However, IShares VII is 13.72 times more volatile than iSh iBds Dec27. It trades about 0.18 of its potential returns per unit of risk. iSh iBds Dec27 is currently generating about 0.28 per unit of risk. If you would invest  3,840,000  in iShares VII PLC on May 27, 2025 and sell it today you would earn a total of  484,500  from holding iShares VII PLC or generate 12.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

iShares VII PLC  vs.  iSh iBds Dec27

iShares VII PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares VII PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares VII unveiled solid returns over the last few months and may actually be approaching a breakup point.

iSh iBds Dec27

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iSh iBds Dec27 are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, ISh IBds is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares VII and ISh IBds

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

The idea behind iShares VII PLC and iSh iBds Dec27 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.