Correlation Between BondBloxx ETF and IShares Broad

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

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

Diversification Opportunities for BondBloxx ETF and IShares Broad

0.97

Correlation Coefficient

BondBloxx ETF  IShares Broad

Almost no diversification

The 3 months correlation between BondBloxx and IShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding BondBloxx ETF Trust and iShares Broad USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Broad USD and BondBloxx ETF 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 BondBloxx ETF Trust are associated (or correlated) with IShares Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Broad USD has no effect on the direction of BondBloxx ETF i.e., BondBloxx ETF and IShares Broad go up and down completely randomly.

Pair Corralation between BondBloxx ETF and IShares Broad

Allowing for the 90-day total investment horizon BondBloxx ETF is expected to generate 1.06 times less return on investment than IShares Broad. In addition to that, BondBloxx ETF is 1.04 times more volatile than iShares Broad USD. It trades about 0.09 of its total potential returns per unit of risk. iShares Broad USD is currently generating about 0.09 per unit of volatility. If you would invest  3,102  in iShares Broad USD on August 22, 2024 and sell it today you would earn a total of  625.00  from holding iShares Broad USD or generate 20.15% return on investment over 90 days.

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

BondBloxx ETF Trust  vs.  iShares Broad USD

BondBloxx ETF Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

iShares Broad USD

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Broad USD are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, IShares Broad is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BondBloxx ETF and IShares Broad

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

The idea behind BondBloxx ETF Trust and iShares Broad USD 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.