Correlation Between BNY Mellon and IShares ESG
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and IShares ESG 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 BNY Mellon and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon ETF and iShares ESG Aware, you can compare the effects of market volatilities on BNY Mellon and IShares ESG 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 BNY Mellon with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and IShares ESG.
Diversification Opportunities for BNY Mellon and IShares ESG
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNY and IShares is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon ETF and iShares ESG Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aware and BNY Mellon 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 BNY Mellon ETF are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aware has no effect on the direction of BNY Mellon i.e., BNY Mellon and IShares ESG go up and down completely randomly.
Pair Corralation between BNY Mellon and IShares ESG
Given the investment horizon of 90 days BNY Mellon is expected to generate 2.03 times less return on investment than IShares ESG. In addition to that, BNY Mellon is 1.66 times more volatile than iShares ESG Aware. It trades about 0.04 of its total potential returns per unit of risk. iShares ESG Aware is currently generating about 0.14 per unit of volatility. If you would invest 7,807 in iShares ESG Aware on September 13, 2024 and sell it today you would earn a total of 134.00 from holding iShares ESG Aware or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BNY Mellon ETF vs. iShares ESG Aware
Performance |
| Timeline |
| BNY Mellon ETF |
| iShares ESG Aware |
BNY Mellon and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and IShares ESG
The main advantage of trading using opposite BNY Mellon and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, IShares ESG 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 ESG will offset losses from the drop in IShares ESG's long position.| BNY Mellon vs. BNY Mellon Mid | BNY Mellon vs. BNY Mellon International | BNY Mellon vs. BNY Mellon Large | BNY Mellon vs. BNY Mellon ETF |
| IShares ESG vs. iShares MSCI Intl | IShares ESG vs. iShares MSCI Intl | IShares ESG vs. iShares Currency Hedged | IShares ESG vs. iShares Edge MSCI |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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