Correlation Between IShares Technology and Global X

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

By analyzing existing cross correlation between iShares Technology ETF and Global X Internet, you can compare the effects of market volatilities on IShares Technology and Global X 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 Technology with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and Global X.

Diversification Opportunities for IShares Technology and Global X

0.93

Correlation Coefficient

IShares Technology  Global X

Almost no diversification

The 3 months correlation between IShares and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Technology ETF and Global X Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Internet and IShares Technology 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 Technology ETF are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Internet has no effect on the direction of IShares Technology i.e., IShares Technology and Global X go up and down completely randomly.

Pair Corralation between IShares Technology and Global X

Considering the 90-day investment horizon iShares Technology ETF is expected to generate 0.79 times more return on investment than Global X. However, iShares Technology ETF is 1.27 times less risky than Global X. It trades about 0.29 of its potential returns per unit of risk. Global X Internet is currently generating about 0.09 per unit of risk. If you would invest  14,721  in iShares Technology ETF on May 5, 2025 and sell it today you would earn a total of  3,003  from holding iShares Technology ETF or generate 20.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Technology ETF  vs.  Global X Internet

iShares Technology ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Technology ETF are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, IShares Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Global X Internet

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Internet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IShares Technology and Global X

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

The idea behind iShares Technology ETF and Global X Internet 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.