Correlation Between IShares Trust and MicroAlgo

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

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

Diversification Opportunities for IShares Trust and MicroAlgo

-0.77

Correlation Coefficient

IShares Trust  MicroAlgo

Pay attention - limited upside

The 3 months correlation between IShares and MicroAlgo is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of IShares Trust i.e., IShares Trust and MicroAlgo go up and down completely randomly.

Pair Corralation between IShares Trust and MicroAlgo

Given the investment horizon of 90 days iShares Trust is expected to generate 0.01 times more return on investment than MicroAlgo. However, iShares Trust is 82.27 times less risky than MicroAlgo. It trades about 0.3 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.27 per unit of risk. If you would invest  2,472  in iShares Trust on April 30, 2025 and sell it today you would earn a total of  70.00  from holding iShares Trust or generate 2.83% return on investment over 90 days.

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

iShares Trust   vs.  MicroAlgo

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.

MicroAlgo

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with IShares Trust and MicroAlgo

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

The idea behind iShares Trust and MicroAlgo 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.