Correlation Between IShares Expanded and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and MicroSectors FANG 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 Expanded and MicroSectors FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech Software and MicroSectors FANG ETN, you can compare the effects of market volatilities on IShares Expanded and MicroSectors FANG 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 Expanded with a short position of MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and MicroSectors FANG.
Diversification Opportunities for IShares Expanded and MicroSectors FANG
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and MicroSectors is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN and IShares Expanded 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 Expanded Tech Software are associated (or correlated) with MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of IShares Expanded i.e., IShares Expanded and MicroSectors FANG go up and down completely randomly.
Pair Corralation between IShares Expanded and MicroSectors FANG
Considering the 90-day investment horizon IShares Expanded is expected to generate 2.04 times less return on investment than MicroSectors FANG. In addition to that, IShares Expanded is 1.03 times more volatile than MicroSectors FANG ETN. It trades about 0.08 of its total potential returns per unit of risk. MicroSectors FANG ETN is currently generating about 0.16 per unit of volatility. If you would invest 6,044 in MicroSectors FANG ETN on May 31, 2025 and sell it today you would earn a total of 662.00 from holding MicroSectors FANG ETN or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. MicroSectors FANG ETN
Performance |
| Timeline |
| iShares Expanded Tech |
| MicroSectors FANG ETN |
IShares Expanded and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and MicroSectors FANG
The main advantage of trading using opposite IShares Expanded and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| IShares Expanded vs. First Trust Technology | IShares Expanded vs. Invesco Dynamic Semiconductors | IShares Expanded vs. Invesco DWA Technology | IShares Expanded vs. ProShares UltraShort Technology |
| MicroSectors FANG vs. Strategy Shares | MicroSectors FANG vs. Freedom Day Dividend | MicroSectors FANG vs. iShares MSCI China | MicroSectors FANG vs. iShares Dividend and |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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