Correlation Between Capital Group and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Capital Group 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 Capital Group and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group International and iShares ESG Aggregate, you can compare the effects of market volatilities on Capital Group 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 Capital Group with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and IShares ESG.
Diversification Opportunities for Capital Group and IShares ESG
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and IShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group International and iShares ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aggregate and Capital Group 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 Capital Group International 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 Aggregate has no effect on the direction of Capital Group i.e., Capital Group and IShares ESG go up and down completely randomly.
Pair Corralation between Capital Group and IShares ESG
Given the investment horizon of 90 days Capital Group International is expected to under-perform the IShares ESG. In addition to that, Capital Group is 2.11 times more volatile than iShares ESG Aggregate. It trades about -0.09 of its total potential returns per unit of risk. iShares ESG Aggregate is currently generating about 0.19 per unit of volatility. If you would invest 4,685 in iShares ESG Aggregate on September 2, 2024 and sell it today you would earn a total of 71.00 from holding iShares ESG Aggregate or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group International vs. iShares ESG Aggregate
Performance |
| Timeline |
| Capital Group Intern |
| iShares ESG Aggregate |
Capital Group and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and IShares ESG
The main advantage of trading using opposite Capital Group and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group 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.| Capital Group vs. iShares ESG Aggregate | Capital Group vs. SPDR MSCI Emerging | Capital Group vs. Aquagold International | Capital Group vs. Thrivent High Yield |
| IShares ESG vs. iShares ESG 1 5 | IShares ESG vs. iShares ESG USD | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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