Correlation Between IShares SP and IShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both IShares SP and IShares Nasdaq 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 SP and IShares Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and iShares Nasdaq 100 ex, you can compare the effects of market volatilities on IShares SP and IShares Nasdaq 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 SP with a short position of IShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and IShares Nasdaq.
Diversification Opportunities for IShares SP and IShares Nasdaq
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and iShares Nasdaq 100 ex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nasdaq 100 and IShares SP 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 SP 500 are associated (or correlated) with IShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nasdaq 100 has no effect on the direction of IShares SP i.e., IShares SP and IShares Nasdaq go up and down completely randomly.
Pair Corralation between IShares SP and IShares Nasdaq
Considering the 90-day investment horizon IShares SP is expected to generate 1.29 times less return on investment than IShares Nasdaq. In addition to that, IShares SP is 1.19 times more volatile than iShares Nasdaq 100 ex. It trades about 0.11 of its total potential returns per unit of risk. iShares Nasdaq 100 ex is currently generating about 0.16 per unit of volatility. If you would invest 2,483 in iShares Nasdaq 100 ex on September 1, 2024 and sell it today you would earn a total of 108.00 from holding iShares Nasdaq 100 ex or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.43% |
| Values | Daily Returns |
iShares SP 500 vs. iShares Nasdaq 100 ex
Performance |
| Timeline |
| iShares SP 500 |
| iShares Nasdaq 100 |
IShares SP and IShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and IShares Nasdaq
The main advantage of trading using opposite IShares SP and IShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, IShares Nasdaq 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 Nasdaq will offset losses from the drop in IShares Nasdaq's long position.| IShares SP vs. FT Vest Equity | IShares SP vs. Northern Lights | IShares SP vs. Dimensional International High | IShares SP vs. Matthews China Discovery |
| IShares Nasdaq vs. Vanguard Growth Index | IShares Nasdaq vs. iShares Russell 1000 | IShares Nasdaq vs. iShares SP 500 | IShares Nasdaq vs. iShares Core SP |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |