Correlation Between IShares Technology and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both IShares Technology and SPDR Galaxy 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 SPDR Galaxy 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 SPDR Galaxy Transformative, you can compare the effects of market volatilities on IShares Technology and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and SPDR Galaxy.
Diversification Opportunities for IShares Technology and SPDR Galaxy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and SPDR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Technology ETF and SPDR Galaxy Transformative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Transfor 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 SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Transfor has no effect on the direction of IShares Technology i.e., IShares Technology and SPDR Galaxy go up and down completely randomly.
Pair Corralation between IShares Technology and SPDR Galaxy
Considering the 90-day investment horizon iShares Technology ETF is expected to generate 0.44 times more return on investment than SPDR Galaxy. However, iShares Technology ETF is 2.25 times less risky than SPDR Galaxy. It trades about 0.07 of its potential returns per unit of risk. SPDR Galaxy Transformative is currently generating about 0.03 per unit of risk. If you would invest 14,899 in iShares Technology ETF on November 1, 2024 and sell it today you would earn a total of 1,148 from holding iShares Technology ETF or generate 7.71% 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. SPDR Galaxy Transformative
Performance |
| Timeline |
| iShares Technology ETF |
| SPDR Galaxy Transfor |
IShares Technology and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Technology and SPDR Galaxy
The main advantage of trading using opposite IShares Technology and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Technology position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy'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 |
| SPDR Galaxy vs. Freedom Day Dividend | SPDR Galaxy vs. Franklin Templeton ETF | SPDR Galaxy vs. iShares MSCI China | SPDR Galaxy vs. Tidal Trust II |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |