Correlation Between SPDR Barclays and IShares Aaa
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and IShares Aaa 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 SPDR Barclays and IShares Aaa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and iShares Aaa , you can compare the effects of market volatilities on SPDR Barclays and IShares Aaa 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 SPDR Barclays with a short position of IShares Aaa. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and IShares Aaa.
Diversification Opportunities for SPDR Barclays and IShares Aaa
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and iShares Aaa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Aaa and SPDR Barclays 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 SPDR Barclays Intermediate are associated (or correlated) with IShares Aaa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Aaa has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and IShares Aaa go up and down completely randomly.
Pair Corralation between SPDR Barclays and IShares Aaa
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.68 times more return on investment than IShares Aaa. However, SPDR Barclays Intermediate is 1.48 times less risky than IShares Aaa. It trades about 0.02 of its potential returns per unit of risk. iShares Aaa is currently generating about -0.02 per unit of risk. If you would invest 3,225 in SPDR Barclays Intermediate on February 12, 2024 and sell it today you would earn a total of 8.00 from holding SPDR Barclays Intermediate or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Intermediate vs. iShares Aaa
Performance |
| Timeline |
| SPDR Barclays Interm |
| iShares Aaa |
SPDR Barclays and IShares Aaa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and IShares Aaa
The main advantage of trading using opposite SPDR Barclays and IShares Aaa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, IShares Aaa 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 Aaa will offset losses from the drop in IShares Aaa's long position.| SPDR Barclays vs. iShares iBonds 2026 | SPDR Barclays vs. iShares iBonds Dec | SPDR Barclays vs. iShares 25 Year |
| IShares Aaa vs. iShares iBonds 2026 | IShares Aaa vs. iShares iBonds Dec | IShares Aaa vs. iShares 25 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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