Correlation Between IShares and IShares Global

Can any of the company-specific risk be diversified away by investing in both IShares 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 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 and iShares Global Tech, you can compare the effects of market volatilities on IShares 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 with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and IShares Global.

Diversification Opportunities for IShares and IShares Global

0.0

Correlation Coefficient

IShares  IShares Global

Pay attention - limited upside

The 3 months correlation between IShares and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares 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 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 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 i.e., IShares and IShares Global go up and down completely randomly.

Pair Corralation between IShares and IShares Global

If you would invest  7,904  in iShares Global Tech on May 7, 2025 and sell it today you would earn a total of  1,690  from holding iShares Global Tech or generate 21.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IShares  vs.  iShares Global Tech

IShares

Risk-Adjusted Performance

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, IShares is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

iShares Global Tech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Tech are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, IShares Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares and IShares Global

The main advantage of trading using opposite IShares and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.

The idea behind IShares and iShares Global Tech 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.