Correlation Between SPDR SP and IShares VII

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

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

Diversification Opportunities for SPDR SP and IShares VII

0.0

Correlation Coefficient

SPDR SP  IShares VII

Pay attention - limited upside

The 3 months correlation between SPDR and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Technology and iShares VII PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII PLC 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 Technology are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII PLC has no effect on the direction of SPDR SP i.e., SPDR SP and IShares VII go up and down completely randomly.

Pair Corralation between SPDR SP and IShares VII

If you would invest  3,574,000  in iShares VII PLC on April 24, 2025 and sell it today you would earn a total of  447,500  from holding iShares VII PLC or generate 12.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

SPDR SP Technology  vs.  iShares VII PLC

SPDR SP Technology

Risk-Adjusted Performance

Strong

Over the last 90 days SPDR SP Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPDR SP is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iShares VII PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares VII PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares VII may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SPDR SP and IShares VII

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

The idea behind SPDR SP Technology and iShares VII PLC 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.

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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.