Correlation Between IShares Trust and Array Technologies

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

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

Diversification Opportunities for IShares Trust and Array Technologies

0.36

Correlation Coefficient

IShares Trust  Array Technologies

Weak diversification

The 3 months correlation between IShares and Array is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Array Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Array Technologies and IShares Trust 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 Trust are associated (or correlated) with Array Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Array Technologies has no effect on the direction of IShares Trust i.e., IShares Trust and Array Technologies go up and down completely randomly.

Pair Corralation between IShares Trust and Array Technologies

Given the investment horizon of 90 days IShares Trust is expected to generate 12.9 times less return on investment than Array Technologies. But when comparing it to its historical volatility, iShares Trust is 37.12 times less risky than Array Technologies. It trades about 0.3 of its potential returns per unit of risk. Array Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  493.00  in Array Technologies on May 3, 2025 and sell it today you would earn a total of  157.00  from holding Array Technologies or generate 31.85% return on investment over 90 days.

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

iShares Trust   vs.  Array Technologies

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Array Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Array Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Array Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Trust and Array Technologies

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

The idea behind iShares Trust and Array Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.