Correlation Between IShares Core and Nasdaq-100 Fund

Can any of the company-specific risk be diversified away by investing in both IShares Core and Nasdaq-100 Fund 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 Core and Nasdaq-100 Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core International and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on IShares Core and Nasdaq-100 Fund 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 Core with a short position of Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Nasdaq-100 Fund.

Diversification Opportunities for IShares Core and Nasdaq-100 Fund

0.62

Correlation Coefficient

IShares Core  Nasdaq-100 Fund

Poor diversification

The 3 months correlation between IShares and Nasdaq-100 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core International and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund and IShares Core 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 Core International are associated (or correlated) with Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of IShares Core i.e., IShares Core and Nasdaq-100 Fund go up and down completely randomly.

Pair Corralation between IShares Core and Nasdaq-100 Fund

Given the investment horizon of 90 days IShares Core is expected to generate 15.05 times less return on investment than Nasdaq-100 Fund. But when comparing it to its historical volatility, iShares Core International is 5.33 times less risky than Nasdaq-100 Fund. It trades about 0.09 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  6,797  in Nasdaq 100 Fund Class on May 6, 2025 and sell it today you would earn a total of  1,008  from holding Nasdaq 100 Fund Class or generate 14.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

iShares Core International  vs.  Nasdaq 100 Fund Class

iShares Core Interna

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, IShares Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nasdaq 100 Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Fund Class are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nasdaq-100 Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Core and Nasdaq-100 Fund

The main advantage of trading using opposite IShares Core and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund's long position.

The idea behind iShares Core International and Nasdaq 100 Fund Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.