Correlation Between Abrdn Bloomberg and IShares Short

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Can any of the company-specific risk be diversified away by investing in both Abrdn Bloomberg and IShares Short 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 Abrdn Bloomberg and IShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abrdn Bloomberg All and IShares Short Maturity, you can compare the effects of market volatilities on Abrdn Bloomberg and IShares Short 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 Abrdn Bloomberg with a short position of IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Bloomberg and IShares Short.

Diversification Opportunities for Abrdn Bloomberg and IShares Short

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Abrdn and IShares is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Bloomberg All and IShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Short Maturity and Abrdn Bloomberg 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 Abrdn Bloomberg All are associated (or correlated) with IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Short Maturity has no effect on the direction of Abrdn Bloomberg i.e., Abrdn Bloomberg and IShares Short go up and down completely randomly.

Pair Corralation between Abrdn Bloomberg and IShares Short

Considering the 90-day investment horizon Abrdn Bloomberg All is expected to under-perform the IShares Short. In addition to that, Abrdn Bloomberg is 7.51 times more volatile than IShares Short Maturity. It trades about -0.02 of its total potential returns per unit of risk. IShares Short Maturity is currently generating about 0.13 per unit of volatility. If you would invest  4,616  in IShares Short Maturity on December 30, 2023 and sell it today you would earn a total of  430.00  from holding IShares Short Maturity or generate 9.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Abrdn Bloomberg All  vs.  IShares Short Maturity

 Performance 
       Timeline  
Abrdn Bloomberg All 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Abrdn Bloomberg All are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Abrdn Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
IShares Short Maturity 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Short Maturity are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IShares Short is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Abrdn Bloomberg and IShares Short Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abrdn Bloomberg and IShares Short

The main advantage of trading using opposite Abrdn Bloomberg and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Bloomberg position performs unexpectedly, IShares Short 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 Short will offset losses from the drop in IShares Short's long position.
The idea behind Abrdn Bloomberg All and IShares Short Maturity 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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