Correlation Between SPDR Barclays and IShares Broad
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and IShares Broad 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 Broad USD, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of IShares Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and IShares Broad.
Diversification Opportunities for SPDR Barclays and IShares Broad
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate 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 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 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 SPDR Barclays i.e., SPDR Barclays and IShares Broad go up and down completely randomly.
Pair Corralation between SPDR Barclays and IShares Broad
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.67 times more return on investment than IShares Broad. However, SPDR Barclays Intermediate is 1.5 times less risky than IShares Broad. It trades about -0.17 of its potential returns per unit of risk. iShares Broad USD is currently generating about -0.18 per unit of risk. If you would invest 3,252 in SPDR Barclays Intermediate on January 25, 2024 and sell it today you would lose (32.00) from holding SPDR Barclays Intermediate or give up 0.98% of portfolio value 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 Broad USD
Performance |
| Timeline |
| SPDR Barclays Interm |
| iShares Broad USD |
SPDR Barclays and IShares Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and IShares Broad
The main advantage of trading using opposite SPDR Barclays and IShares Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.| SPDR Barclays vs. iShares iBonds 2026 | SPDR Barclays vs. iShares iBonds Dec | SPDR Barclays vs. iShares 25 Year |
| IShares Broad vs. iShares iBonds 2026 | IShares Broad vs. iShares iBonds Dec | IShares Broad 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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