Correlation Between Bondbloxx ETF and Schwab International

Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF and Schwab International 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 Schwab International 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 Schwab International Index, you can compare the effects of market volatilities on Bondbloxx ETF and Schwab International 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 Schwab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Schwab International.

Diversification Opportunities for Bondbloxx ETF and Schwab International

0.68

Correlation Coefficient

Bondbloxx ETF  Schwab International

Poor diversification

The 3 months correlation between Bondbloxx and Schwab is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Schwab International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab International 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 Schwab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab International has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Schwab International go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Schwab International

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 2.61 times less return on investment than Schwab International. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 6.13 times less risky than Schwab International. It trades about 0.15 of its potential returns per unit of risk. Schwab International Index is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,072  in Schwab International Index on September 12, 2024 and sell it today you would earn a total of  368.00  from holding Schwab International Index or generate 17.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.7%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Schwab International Index

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. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Schwab International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schwab International Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Schwab International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Schwab International

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

The idea behind Bondbloxx ETF Trust and Schwab International Index 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.