Correlation Between IShares SP and IShares SP
Can any of the company-specific risk be diversified away by investing in both IShares SP and IShares SP 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 SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 100 and iShares SP Mid Cap, you can compare the effects of market volatilities on IShares SP and IShares SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and IShares SP.
Diversification Opportunities for IShares SP and IShares SP
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 100 and iShares SP Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP Mid 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 100 are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP Mid has no effect on the direction of IShares SP i.e., IShares SP and IShares SP go up and down completely randomly.
Pair Corralation between IShares SP and IShares SP
Considering the 90-day investment horizon iShares SP 100 is expected to generate 0.78 times more return on investment than IShares SP. However, iShares SP 100 is 1.29 times less risky than IShares SP. It trades about 0.12 of its potential returns per unit of risk. iShares SP Mid Cap is currently generating about 0.06 per unit of risk. If you would invest 17,398 in iShares SP 100 on September 2, 2024 and sell it today you would earn a total of 11,617 from holding iShares SP 100 or generate 66.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 100 vs. iShares SP Mid Cap
Performance |
| Timeline |
| iShares SP 100 |
| iShares SP Mid |
IShares SP and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and IShares SP
The main advantage of trading using opposite IShares SP and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, IShares SP 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 SP will offset losses from the drop in IShares SP's long position.| IShares SP vs. Vanguard Total Stock | IShares SP vs. SPDR SP 500 | IShares SP vs. iShares Core SP | IShares SP vs. Vanguard Dividend Appreciation |
| IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP 500 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |