Correlation Between BetaPro SP and IShares Small
Can any of the company-specific risk be diversified away by investing in both BetaPro SP and IShares Small 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 BetaPro SP and IShares Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and iShares Small Cap, you can compare the effects of market volatilities on BetaPro SP and IShares Small 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 BetaPro SP with a short position of IShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and IShares Small.
Diversification Opportunities for BetaPro SP and IShares Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BetaPro and IShares is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and iShares Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Small Cap and BetaPro 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 BetaPro SP 500 are associated (or correlated) with IShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Small Cap has no effect on the direction of BetaPro SP i.e., BetaPro SP and IShares Small go up and down completely randomly.
Pair Corralation between BetaPro SP and IShares Small
Assuming the 90 days trading horizon BetaPro SP 500 is expected to generate 1.15 times more return on investment than IShares Small. However, BetaPro SP is 1.15 times more volatile than iShares Small Cap. It trades about 0.12 of its potential returns per unit of risk. iShares Small Cap is currently generating about 0.08 per unit of risk. If you would invest 2,826 in BetaPro SP 500 on September 2, 2025 and sell it today you would earn a total of 335.00 from holding BetaPro SP 500 or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. iShares Small Cap
Performance |
| Timeline |
| BetaPro SP 500 |
| iShares Small Cap |
BetaPro SP and IShares Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and IShares Small
The main advantage of trading using opposite BetaPro SP and IShares Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP position performs unexpectedly, IShares Small 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 Small will offset losses from the drop in IShares Small's long position.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro Gold Bullion | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro NASDAQ 100 2x |
| IShares Small vs. iShares Convertible Bond | IShares Small vs. iShares SP Mid Cap | IShares Small vs. iShares Edge MSCI | IShares Small vs. iShares Flexible Monthly |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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