Correlation Between CI Global and IShares ESG
Can any of the company-specific risk be diversified away by investing in both CI Global 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 CI Global and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Global Real and iShares ESG Equity, you can compare the effects of market volatilities on CI Global 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 CI Global with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and IShares ESG.
Diversification Opportunities for CI Global and IShares ESG
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CGRA and IShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Real and iShares ESG Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Equity and CI Global 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 CI Global Real 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 Equity has no effect on the direction of CI Global i.e., CI Global and IShares ESG go up and down completely randomly.
Pair Corralation between CI Global and IShares ESG
Assuming the 90 days trading horizon CI Global Real is expected to under-perform the IShares ESG. But the etf apears to be less risky and, when comparing its historical volatility, CI Global Real is 1.81 times less risky than IShares ESG. The etf trades about -0.19 of its potential returns per unit of risk. The iShares ESG Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,559 in iShares ESG Equity on November 27, 2024 and sell it today you would earn a total of 42.00 from holding iShares ESG Equity or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Global Real vs. iShares ESG Equity
Performance |
| Timeline |
| CI Global Real |
| iShares ESG Equity |
CI Global and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and IShares ESG
The main advantage of trading using opposite CI Global and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global 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.| CI Global vs. CI Global REIT | CI Global vs. CI Global Infrastructure | CI Global vs. CI Global Asset | CI Global vs. CI Marret Alternative |
| IShares ESG vs. iShares ESG Growth | IShares ESG vs. iShares ESG Balanced | IShares ESG vs. iShares ESG Advanced | IShares ESG vs. iShares ESG Advanced |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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