Correlation Between IShares Expanded and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and Nasdaq 100 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 Expanded and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech Software and Nasdaq 100, you can compare the effects of market volatilities on IShares Expanded and Nasdaq 100 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 Expanded with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and Nasdaq 100.
Diversification Opportunities for IShares Expanded and Nasdaq 100
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Nasdaq is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 and IShares Expanded 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 Expanded Tech Software are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 has no effect on the direction of IShares Expanded i.e., IShares Expanded and Nasdaq 100 go up and down completely randomly.
Pair Corralation between IShares Expanded and Nasdaq 100
Considering the 90-day investment horizon iShares Expanded Tech Software is expected to generate 1.18 times more return on investment than Nasdaq 100. However, IShares Expanded is 1.18 times more volatile than Nasdaq 100. It trades about 0.12 of its potential returns per unit of risk. Nasdaq 100 is currently generating about 0.11 per unit of risk. If you would invest 6,980 in iShares Expanded Tech Software on September 1, 2024 and sell it today you would earn a total of 3,496 from holding iShares Expanded Tech Software or generate 50.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.42% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. Nasdaq 100
Performance |
| Timeline |
| iShares Expanded Tech |
| Nasdaq 100 |
IShares Expanded and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and Nasdaq 100
The main advantage of trading using opposite IShares Expanded and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| IShares Expanded vs. First Trust Exchange Traded | IShares Expanded vs. Ultimus Managers Trust | IShares Expanded vs. Horizon Kinetics Medical | IShares Expanded vs. Harbor Health Care |
| Nasdaq 100 vs. Brent Crude Oil | Nasdaq 100 vs. Natural Gas | Nasdaq 100 vs. Five Year Treasury Note | Nasdaq 100 vs. Micro Gold Futures |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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