Correlation Between SPDR SP and IShares Utilities
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IShares Utilities 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 SPDR SP and IShares Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Semiconductor and iShares Utilities ETF, you can compare the effects of market volatilities on SPDR SP and IShares Utilities 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 SPDR SP with a short position of IShares Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IShares Utilities.
Diversification Opportunities for SPDR SP and IShares Utilities
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and IShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Semiconductor and iShares Utilities ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Utilities ETF and SPDR 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 SPDR SP Semiconductor are associated (or correlated) with IShares Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Utilities ETF has no effect on the direction of SPDR SP i.e., SPDR SP and IShares Utilities go up and down completely randomly.
Pair Corralation between SPDR SP and IShares Utilities
Considering the 90-day investment horizon SPDR SP Semiconductor is expected to generate 4.13 times more return on investment than IShares Utilities. However, SPDR SP is 4.13 times more volatile than iShares Utilities ETF. It trades about 0.07 of its potential returns per unit of risk. iShares Utilities ETF is currently generating about -0.1 per unit of risk. If you would invest 33,678 in SPDR SP Semiconductor on August 6, 2025 and sell it today you would earn a total of 1,099 from holding SPDR SP Semiconductor or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Semiconductor vs. iShares Utilities ETF
Performance |
| Timeline |
| SPDR SP Semiconductor |
| iShares Utilities ETF |
SPDR SP and IShares Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IShares Utilities
The main advantage of trading using opposite SPDR SP and IShares Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IShares Utilities 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 Utilities will offset losses from the drop in IShares Utilities' long position.| SPDR SP vs. SPDR SP Homebuilders | SPDR SP vs. Invesco SP 500 | SPDR SP vs. WisdomTree Trust | SPDR SP vs. SPDR SP Oil |
| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares MSCI Australia | IShares Utilities vs. iShares Financial Services | IShares Utilities vs. iShares Broker Dealers Securities |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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