Correlation Between IShares Technology and Penta Teknoloji

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

By analyzing existing cross correlation between iShares Technology ETF and Penta Teknoloji Urunleri, you can compare the effects of market volatilities on IShares Technology and Penta Teknoloji 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 Technology with a short position of Penta Teknoloji. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Technology and Penta Teknoloji.

Diversification Opportunities for IShares Technology and Penta Teknoloji

0.0

Correlation Coefficient

IShares Technology  Penta Teknoloji

Pay attention - limited upside

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

Pair Corralation between IShares Technology and Penta Teknoloji

Considering the 90-day investment horizon iShares Technology ETF is expected to generate 0.69 times more return on investment than Penta Teknoloji. However, iShares Technology ETF is 1.44 times less risky than Penta Teknoloji. It trades about 0.4 of its potential returns per unit of risk. Penta Teknoloji Urunleri is currently generating about -0.12 per unit of risk. If you would invest  12,852  in iShares Technology ETF on February 23, 2024 and sell it today you would earn a total of  1,353  from holding iShares Technology ETF or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

iShares Technology ETF  vs.  Penta Teknoloji Urunleri

iShares Technology ETF

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Technology ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Technology is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Penta Teknoloji Urunleri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Penta Teknoloji Urunleri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with IShares Technology and Penta Teknoloji

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

The idea behind iShares Technology ETF and Penta Teknoloji Urunleri 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.