Correlation Between IShares Technology and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Technology and IShares Global 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 Global 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 Global Tech, you can compare the effects of market volatilities on IShares Technology and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and IShares Global.
Diversification Opportunities for IShares Technology and IShares Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Technology ETF and iShares Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Tech 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Tech has no effect on the direction of IShares Technology i.e., IShares Technology and IShares Global go up and down completely randomly.
Pair Corralation between IShares Technology and IShares Global
Considering the 90-day investment horizon IShares Technology is expected to generate 1.03 times less return on investment than IShares Global. But when comparing it to its historical volatility, iShares Technology ETF is 1.12 times less risky than IShares Global. It trades about 0.09 of its potential returns per unit of risk. iShares Global Tech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,530 in iShares Global Tech on November 18, 2024 and sell it today you would earn a total of 245.00 from holding iShares Global Tech or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Technology ETF vs. iShares Global Tech
Performance |
| Timeline |
| iShares Technology ETF |
| iShares Global Tech |
IShares Technology and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Technology and IShares Global
The main advantage of trading using opposite IShares Technology and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Technology position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global'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 |
| IShares Global vs. iShares Global Financials | IShares Global vs. iShares Global Comm | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Expanded Tech |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |