Correlation Between IShares ESG and Fidelity Investment
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Fidelity Investment 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 IShares ESG and Fidelity Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Aggregate and Fidelity Investment Grade, you can compare the effects of market volatilities on IShares ESG and Fidelity Investment 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 IShares ESG with a short position of Fidelity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Fidelity Investment.
Diversification Opportunities for IShares ESG and Fidelity Investment
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aggregate and Fidelity Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Investment Grade and IShares ESG 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 iShares ESG Aggregate are associated (or correlated) with Fidelity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Investment Grade has no effect on the direction of IShares ESG i.e., IShares ESG and Fidelity Investment go up and down completely randomly.
Pair Corralation between IShares ESG and Fidelity Investment
Given the investment horizon of 90 days IShares ESG is expected to generate 1.42 times less return on investment than Fidelity Investment. In addition to that, IShares ESG is 1.09 times more volatile than Fidelity Investment Grade. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Investment Grade is currently generating about 0.06 per unit of volatility. If you would invest 4,279 in Fidelity Investment Grade on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Fidelity Investment Grade or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aggregate vs. Fidelity Investment Grade
Performance |
| Timeline |
| iShares ESG Aggregate |
| Fidelity Investment Grade |
IShares ESG and Fidelity Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Fidelity Investment
The main advantage of trading using opposite IShares ESG and Fidelity Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Fidelity Investment 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 Fidelity Investment will offset losses from the drop in Fidelity Investment's long position.| 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 |
| Fidelity Investment vs. Fidelity Investment Grade | Fidelity Investment vs. Fidelity Corporate Bond | Fidelity Investment vs. Fidelity Limited Term | Fidelity Investment vs. Fidelity Covington Trust |
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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