Correlation Between IShares Core and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Short, you can compare the effects of market volatilities on IShares Core and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR Barclays.
Diversification Opportunities for IShares Core and SPDR Barclays
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and SPDR Barclays Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Short 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Short has no effect on the direction of IShares Core i.e., IShares Core and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares Core and SPDR Barclays
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 13.91 times more return on investment than SPDR Barclays. However, IShares Core is 13.91 times more volatile than SPDR Barclays Short. It trades about 0.07 of its potential returns per unit of risk. SPDR Barclays Short is currently generating about 0.18 per unit of risk. If you would invest 6,313 in iShares Core MSCI on March 23, 2025 and sell it today you would earn a total of 388.00 from holding iShares Core MSCI or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. SPDR Barclays Short
Performance |
| Timeline |
| iShares Core MSCI |
| SPDR Barclays Short |
IShares Core and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SPDR Barclays
The main advantage of trading using opposite IShares Core and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core International | IShares Core vs. iShares Core 10 | IShares Core vs. iShares MSCI Emerging |
| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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