Correlation Between IShares International and Blackrock ETF

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

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

Diversification Opportunities for IShares International and Blackrock ETF

-0.87

Correlation Coefficient

IShares International  Blackrock ETF

Pay attention - limited upside

The 3 months correlation between IShares and Blackrock is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Treasury and Blackrock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock ETF Trust and IShares International 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 iShares International Treasury are associated (or correlated) with Blackrock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock ETF Trust has no effect on the direction of IShares International i.e., IShares International and Blackrock ETF go up and down completely randomly.

Pair Corralation between IShares International and Blackrock ETF

Given the investment horizon of 90 days iShares International Treasury is expected to under-perform the Blackrock ETF. In addition to that, IShares International is 2.62 times more volatile than Blackrock ETF Trust. It trades about -0.1 of its total potential returns per unit of risk. Blackrock ETF Trust is currently generating about 0.17 per unit of volatility. If you would invest  5,126  in Blackrock ETF Trust on September 5, 2024 and sell it today you would earn a total of  117.00  from holding Blackrock ETF Trust or generate 2.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

iShares International Treasury  vs.  Blackrock ETF Trust

iShares International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares International Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Blackrock ETF Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock ETF Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Blackrock ETF is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares International and Blackrock ETF

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

The idea behind iShares International Treasury and Blackrock ETF Trust 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.