Correlation Between ETF Series and IShares ESG
Can any of the company-specific risk be diversified away by investing in both ETF Series 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 ETF Series and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETF Series Solutions and iShares ESG Aggregate, you can compare the effects of market volatilities on ETF Series 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 ETF Series with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Series and IShares ESG.
Diversification Opportunities for ETF Series and IShares ESG
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ETF and IShares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ETF Series Solutions 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 ETF Series 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 ETF Series Solutions 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 ETF Series i.e., ETF Series and IShares ESG go up and down completely randomly.
Pair Corralation between ETF Series and IShares ESG
Given the investment horizon of 90 days ETF Series Solutions is expected to under-perform the IShares ESG. In addition to that, ETF Series is 2.35 times more volatile than iShares ESG Aggregate. It trades about -0.1 of its total potential returns per unit of risk. iShares ESG Aggregate is currently generating about 0.13 per unit of volatility. If you would invest 4,705 in iShares ESG Aggregate on September 1, 2024 and sell it today you would earn a total of 51.00 from holding iShares ESG Aggregate or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETF Series Solutions vs. iShares ESG Aggregate
Performance |
| Timeline |
| ETF Series Solutions |
| iShares ESG Aggregate |
ETF Series and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETF Series and IShares ESG
The main advantage of trading using opposite ETF Series and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Series 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.| ETF Series vs. iShares ESG Aggregate | ETF Series vs. SPDR MSCI Emerging | ETF Series vs. Aquagold International | ETF Series 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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