Correlation Between IShares IBonds and IShares Preferred
Can any of the company-specific risk be diversified away by investing in both IShares IBonds and IShares Preferred 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 IBonds and IShares Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBonds 2025 and iShares Preferred and, you can compare the effects of market volatilities on IShares IBonds and IShares Preferred 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 IBonds with a short position of IShares Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and IShares Preferred.
Diversification Opportunities for IShares IBonds and IShares Preferred
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds 2025 and iShares Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Preferred and IShares IBonds 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 iBonds 2025 are associated (or correlated) with IShares Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Preferred has no effect on the direction of IShares IBonds i.e., IShares IBonds and IShares Preferred go up and down completely randomly.
Pair Corralation between IShares IBonds and IShares Preferred
Given the investment horizon of 90 days iShares iBonds 2025 is expected to generate 0.13 times more return on investment than IShares Preferred. However, iShares iBonds 2025 is 7.85 times less risky than IShares Preferred. It trades about 0.3 of its potential returns per unit of risk. iShares Preferred and is currently generating about -0.05 per unit of risk. If you would invest 2,291 in iShares iBonds 2025 on September 10, 2025 and sell it today you would earn a total of 24.00 from holding iShares iBonds 2025 or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBonds 2025 vs. iShares Preferred and
Performance |
| Timeline |
| iShares iBonds 2025 |
| iShares Preferred |
IShares IBonds and IShares Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and IShares Preferred
The main advantage of trading using opposite IShares IBonds and IShares Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds position performs unexpectedly, IShares Preferred 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 Preferred will offset losses from the drop in IShares Preferred's long position.| IShares IBonds vs. iShares iBonds Dec | IShares IBonds vs. iShares JP Morgan | IShares IBonds vs. iShares MSCI France | IShares IBonds vs. Xtrackers MSCI Japan |
| IShares Preferred vs. iShares Russell 2000 | IShares Preferred vs. iShares MSCI Emerging | IShares Preferred vs. iShares MSCI Intl | IShares Preferred vs. iShares Russell 2000 |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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