Correlation Between IShares SP and QRAFT AI

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

By analyzing existing cross correlation between iShares SP 500 and QRAFT AI Enhanced Large, you can compare the effects of market volatilities on IShares SP and QRAFT AI 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 QRAFT AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and QRAFT AI.

Diversification Opportunities for IShares SP and QRAFT AI

0.99

Correlation Coefficient

IShares SP  QRAFT AI

No risk reduction

The 3 months correlation between IShares and QRAFT is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and QRAFT AI Enhanced Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QRAFT AI Enhanced 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 500 are associated (or correlated) with QRAFT AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QRAFT AI Enhanced has no effect on the direction of IShares SP i.e., IShares SP and QRAFT AI go up and down completely randomly.

Pair Corralation between IShares SP and QRAFT AI

Considering the 90-day investment horizon iShares SP 500 is expected to generate 1.07 times more return on investment than QRAFT AI. However, IShares SP is 1.07 times more volatile than QRAFT AI Enhanced Large. It trades about 0.26 of its potential returns per unit of risk. QRAFT AI Enhanced Large is currently generating about 0.23 per unit of risk. If you would invest  9,697  in iShares SP 500 on May 5, 2025 and sell it today you would earn a total of  1,475  from holding iShares SP 500 or generate 15.21% 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 500  vs.  QRAFT AI Enhanced Large

iShares SP 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SP 500 are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, IShares SP showed solid returns over the last few months and may actually be approaching a breakup point.

QRAFT AI Enhanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in QRAFT AI Enhanced Large are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, QRAFT AI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IShares SP and QRAFT AI

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

The idea behind iShares SP 500 and QRAFT AI Enhanced Large 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.