Correlation Between Technology Select and IShares SP
Can any of the company-specific risk be diversified away by investing in both Technology Select 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 Technology Select and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology Select Sector and iShares SP 100, you can compare the effects of market volatilities on Technology Select 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 Technology Select with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Select and IShares SP.
Diversification Opportunities for Technology Select and IShares SP
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Technology and IShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Technology Select Sector and iShares SP 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 100 and Technology Select 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 Technology Select Sector 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 100 has no effect on the direction of Technology Select i.e., Technology Select and IShares SP go up and down completely randomly.
Pair Corralation between Technology Select and IShares SP
Considering the 90-day investment horizon Technology Select Sector is expected to under-perform the IShares SP. In addition to that, Technology Select is 1.41 times more volatile than iShares SP 100. It trades about -0.02 of its total potential returns per unit of risk. iShares SP 100 is currently generating about 0.11 per unit of volatility. If you would invest 28,240 in iShares SP 100 on August 30, 2024 and sell it today you would earn a total of 606.00 from holding iShares SP 100 or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technology Select Sector vs. iShares SP 100
Performance |
| Timeline |
| Technology Select Sector |
| iShares SP 100 |
Technology Select and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology Select and IShares SP
The main advantage of trading using opposite Technology Select and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Select 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.| Technology Select vs. First Trust Exchange Traded | Technology Select vs. Ultimus Managers Trust | Technology Select vs. Horizon Kinetics Medical | Technology Select vs. Harbor Health Care |
| IShares SP vs. JPMorgan BetaBuilders International | IShares SP vs. JPMorgan Core Plus | IShares SP vs. JPMorgan BetaBuilders Canada | IShares SP vs. JPMorgan Emerging Markets |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |