Correlation Between IShares SP and IShares Expanded
Can any of the company-specific risk be diversified away by investing in both IShares SP and IShares Expanded 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 IShares Expanded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP Mid Cap and iShares Expanded Tech, you can compare the effects of market volatilities on IShares SP and IShares Expanded 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 IShares Expanded. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and IShares Expanded.
Diversification Opportunities for IShares SP and IShares Expanded
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and IShares is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Mid Cap and iShares Expanded Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Expanded Tech 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 Mid Cap are associated (or correlated) with IShares Expanded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Expanded Tech has no effect on the direction of IShares SP i.e., IShares SP and IShares Expanded go up and down completely randomly.
Pair Corralation between IShares SP and IShares Expanded
Considering the 90-day investment horizon IShares SP is expected to generate 4.05 times less return on investment than IShares Expanded. But when comparing it to its historical volatility, iShares SP Mid Cap is 1.33 times less risky than IShares Expanded. It trades about 0.04 of its potential returns per unit of risk. iShares Expanded Tech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,208 in iShares Expanded Tech on September 10, 2025 and sell it today you would earn a total of 1,069 from holding iShares Expanded Tech or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
iShares SP Mid Cap vs. iShares Expanded Tech
Performance |
| Timeline |
| iShares SP Mid |
| iShares Expanded Tech |
IShares SP and IShares Expanded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and IShares Expanded
The main advantage of trading using opposite IShares SP and IShares Expanded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, IShares Expanded 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 IShares Expanded will offset losses from the drop in IShares Expanded's long position.| IShares SP vs. Invesco SP 500 | IShares SP vs. First Trust United | IShares SP vs. AAM SP 500 | IShares SP vs. Franklin FTSE Mexico |
| IShares Expanded vs. iShares Global Infrastructure | IShares Expanded vs. iShares MSCI China | IShares Expanded vs. iShares SP Mid Cap | IShares Expanded vs. ARK Innovation ETF |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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