Correlation Between Barclays Capital and IShares SP

Can any of the company-specific risk be diversified away by investing in both Barclays Capital and IShares SP 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 Barclays Capital and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barclays Capital and iShares SP GSCI, you can compare the effects of market volatilities on Barclays Capital and IShares SP 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 Barclays Capital with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and IShares SP.

Diversification Opportunities for Barclays Capital and IShares SP

-0.29

Correlation Coefficient

Barclays Capital  IShares SP

Very good diversification

The 3 months correlation between Barclays and IShares is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and iShares SP GSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP GSCI and Barclays Capital 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 Barclays Capital are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP GSCI has no effect on the direction of Barclays Capital i.e., Barclays Capital and IShares SP go up and down completely randomly.

Pair Corralation between Barclays Capital and IShares SP

If you would invest  2,198  in iShares SP GSCI on February 22, 2024 and sell it today you would earn a total of  45.00  from holding iShares SP GSCI or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.5%
Values	Daily Returns

Barclays Capital  vs.  iShares SP GSCI

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Barclays Capital is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

iShares SP GSCI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP GSCI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IShares SP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Barclays Capital and IShares SP

The main advantage of trading using opposite Barclays Capital and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, IShares SP 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 SP will offset losses from the drop in IShares SP's long position.

The idea behind Barclays Capital and iShares SP GSCI 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.