Correlation Between BondBloxx ETF and IShares Global

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

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

Diversification Opportunities for BondBloxx ETF and IShares Global

-0.41

Correlation Coefficient

BondBloxx ETF  IShares Global

Very good diversification

The 3 months correlation between BondBloxx and IShares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BondBloxx ETF Trust and iShares Global Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Consumer and BondBloxx ETF 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 BondBloxx ETF Trust are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Consumer has no effect on the direction of BondBloxx ETF i.e., BondBloxx ETF and IShares Global go up and down completely randomly.

Pair Corralation between BondBloxx ETF and IShares Global

Given the investment horizon of 90 days BondBloxx ETF is expected to generate 48.8 times less return on investment than IShares Global. But when comparing it to its historical volatility, BondBloxx ETF Trust is 3.09 times less risky than IShares Global. It trades about 0.01 of its potential returns per unit of risk. iShares Global Consumer is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  16,644  in iShares Global Consumer on August 30, 2024 and sell it today you would earn a total of  1,551  from holding iShares Global Consumer or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BondBloxx ETF Trust  vs.  iShares Global Consumer

BondBloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BondBloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Global Consumer

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Consumer are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, IShares Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with BondBloxx ETF and IShares Global

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

The idea behind BondBloxx ETF Trust and iShares Global Consumer 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.