Correlation Between IShares Technology and IShares
Can any of the company-specific risk be diversified away by investing in both IShares Technology and IShares 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 Technology and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Technology ETF and IShares, you can compare the effects of market volatilities on IShares Technology and IShares 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 Technology with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and IShares.
Diversification Opportunities for IShares Technology and IShares
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Technology ETF and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and IShares Technology 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 Technology ETF are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of IShares Technology i.e., IShares Technology and IShares go up and down completely randomly.
Pair Corralation between IShares Technology and IShares
If you would invest 6,417 in IShares on January 24, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.33% |
| Values | Daily Returns |
iShares Technology ETF vs. IShares
Performance |
| Timeline |
| iShares Technology ETF |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Technology and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Technology and IShares
The main advantage of trading using opposite IShares Technology and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Technology position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| IShares Technology vs. iShares Healthcare ETF | IShares Technology vs. iShares Financials ETF | IShares Technology vs. iShares Telecommunications ETF | IShares Technology vs. iShares Industrials ETF |
| IShares vs. iShares Expanded Tech | IShares vs. iShares Consumer Discretionary | IShares vs. iShares Telecommunications ETF | IShares vs. iShares Industrials ETF |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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