Correlation Between IShares TIPS and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both IShares TIPS and SPDR Portfolio 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 TIPS and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares TIPS Bond and SPDR Portfolio TIPS, you can compare the effects of market volatilities on IShares TIPS and SPDR Portfolio 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 TIPS with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares TIPS and SPDR Portfolio.
Diversification Opportunities for IShares TIPS and SPDR Portfolio
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares TIPS Bond and SPDR Portfolio TIPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio TIPS and IShares TIPS 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 TIPS Bond are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio TIPS has no effect on the direction of IShares TIPS i.e., IShares TIPS and SPDR Portfolio go up and down completely randomly.
Pair Corralation between IShares TIPS and SPDR Portfolio
Considering the 90-day investment horizon iShares TIPS Bond is expected to generate about the same return on investment as SPDR Portfolio TIPS. But, iShares TIPS Bond is 1.02 times less risky than SPDR Portfolio. It trades about 0.11 of its potential returns per unit of risk. SPDR Portfolio TIPS is currently generating about 0.11 per unit of risk. If you would invest 2,556 in SPDR Portfolio TIPS on April 23, 2025 and sell it today you would earn a total of 47.00 from holding SPDR Portfolio TIPS or generate 1.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.39% |
Values | Daily Returns |
iShares TIPS Bond vs. SPDR Portfolio TIPS
Performance |
Timeline |
iShares TIPS Bond |
SPDR Portfolio TIPS |
IShares TIPS and SPDR Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares TIPS and SPDR Portfolio
The main advantage of trading using opposite IShares TIPS and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares TIPS position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.IShares TIPS vs. iShares iBoxx Investment | IShares TIPS vs. iShares 1 3 Year | IShares TIPS vs. iShares 7 10 Year | IShares TIPS vs. iShares Core Aggregate |
SPDR Portfolio vs. SPDR Bloomberg 1 10 | SPDR Portfolio vs. iShares 0 5 Year | SPDR Portfolio vs. Schwab TIPS ETF | SPDR Portfolio vs. PIMCO 15 Year |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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