Correlation Between IShares Core and ISh IBds

Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core MSCI and iSh iBds Dec27, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of ISh IBds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and ISh IBds.

Diversification Opportunities for IShares Core and ISh IBds

0.91

Correlation Coefficient

IShares Core  ISh IBds

Almost no diversification

The 3 months correlation between IShares and ISh is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI 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 Core 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 Core MSCI 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 Core i.e., IShares Core and ISh IBds go up and down completely randomly.

Pair Corralation between IShares Core and ISh IBds

Assuming the 90 days trading horizon iShares Core MSCI is expected to generate 10.01 times more return on investment than ISh IBds. However, IShares Core is 10.01 times more volatile than iSh iBds Dec27. It trades about 0.22 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  3,711  in iShares Core MSCI on May 27, 2025 and sell it today you would earn a total of  411.00  from holding iShares Core MSCI or generate 11.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Core MSCI  vs.  iSh iBds Dec27

iShares Core MSCI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Core and ISh IBds

The main advantage of trading using opposite IShares Core and ISh IBds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core MSCI 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.