Correlation Between IShares ESG and SGI Enhanced
Can any of the company-specific risk be diversified away by investing in both IShares ESG and SGI Enhanced 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 SGI Enhanced 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 SGI Enhanced Core, you can compare the effects of market volatilities on IShares ESG and SGI Enhanced 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 SGI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and SGI Enhanced.
Diversification Opportunities for IShares ESG and SGI Enhanced
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and SGI is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aggregate and SGI Enhanced Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Enhanced Core 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 SGI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Enhanced Core has no effect on the direction of IShares ESG i.e., IShares ESG and SGI Enhanced go up and down completely randomly.
Pair Corralation between IShares ESG and SGI Enhanced
Given the investment horizon of 90 days IShares ESG is expected to generate 1.05 times less return on investment than SGI Enhanced. In addition to that, IShares ESG is 3.84 times more volatile than SGI Enhanced Core. It trades about 0.09 of its total potential returns per unit of risk. SGI Enhanced Core is currently generating about 0.35 per unit of volatility. If you would invest 2,622 in SGI Enhanced Core on September 18, 2024 and sell it today you would earn a total of 15.00 from holding SGI Enhanced Core or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aggregate vs. SGI Enhanced Core
Performance |
| Timeline |
| iShares ESG Aggregate |
| SGI Enhanced Core |
IShares ESG and SGI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and SGI Enhanced
The main advantage of trading using opposite IShares ESG and SGI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, SGI Enhanced 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 SGI Enhanced will offset losses from the drop in SGI Enhanced's long position.| IShares ESG vs. ClearShares Ultra Short Maturity | IShares ESG vs. PGIM Active High | IShares ESG vs. Pacer Trendpilot Bond | IShares ESG vs. Pacer Lunt Large |
| SGI Enhanced vs. ClearShares Ultra Short Maturity | SGI Enhanced vs. PGIM Active High | SGI Enhanced vs. Pacer Trendpilot Bond | SGI Enhanced vs. Pacer Lunt Large |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |