Correlation Between IShares Technology and Orange SA
Can any of the company-specific risk be diversified away by investing in both IShares Technology and Orange SA 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 Orange SA 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 Orange SA ADR, you can compare the effects of market volatilities on IShares Technology and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and Orange SA.
Diversification Opportunities for IShares Technology and Orange SA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Orange is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares Technology ETF and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of IShares Technology i.e., IShares Technology and Orange SA go up and down completely randomly.
Pair Corralation between IShares Technology and Orange SA
Considering the 90-day investment horizon iShares Technology ETF is expected to generate 1.13 times more return on investment than Orange SA. However, IShares Technology is 1.13 times more volatile than Orange SA ADR. It trades about 0.4 of its potential returns per unit of risk. Orange SA ADR is currently generating about -0.04 per unit of risk. If you would invest 12,852 in iShares Technology ETF on February 23, 2024 and sell it today you would earn a total of 1,353 from holding iShares Technology ETF or generate 10.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Technology ETF vs. Orange SA ADR
Performance |
Timeline |
iShares Technology ETF |
Orange SA ADR |
IShares Technology and Orange SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Technology and Orange SA
The main advantage of trading using opposite IShares Technology and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Technology position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA's 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 |
Orange SA vs. CarMax Inc | Orange SA vs. Cohu Inc | Orange SA vs. Dreyfus Natural Resources | Orange SA vs. Melco Resorts Entertainment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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