Correlation Between Blockchain Technologies and IShares India

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

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

Diversification Opportunities for Blockchain Technologies and IShares India

0.7

Correlation Coefficient

Blockchain Technologies  IShares India

Poor diversification

The 3 months correlation between Blockchain and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Technologies ETF and iShares India Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares India Index and Blockchain Technologies 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 Blockchain Technologies ETF are associated (or correlated) with IShares India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares India Index has no effect on the direction of Blockchain Technologies i.e., Blockchain Technologies and IShares India go up and down completely randomly.

Pair Corralation between Blockchain Technologies and IShares India

Assuming the 90 days trading horizon Blockchain Technologies ETF is expected to under-perform the IShares India. In addition to that, Blockchain Technologies is 4.75 times more volatile than iShares India Index. It trades about -0.1 of its total potential returns per unit of risk. iShares India Index is currently generating about -0.2 per unit of volatility. If you would invest  5,648  in iShares India Index on December 1, 2024 and sell it today you would lose (428.00) from holding iShares India Index or give up 7.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Blockchain Technologies ETF  vs.  iShares India Index

Blockchain Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blockchain Technologies ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

iShares India Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares India Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Blockchain Technologies and IShares India

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

The idea behind Blockchain Technologies ETF and iShares India Index 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.