Correlation Between IShares ESG and Regents Park
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Regents Park 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 Regents Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Aware and Regents Park Hedged, you can compare the effects of market volatilities on IShares ESG and Regents Park 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 Regents Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Regents Park.
Diversification Opportunities for IShares ESG and Regents Park
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Regents is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Regents Park Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regents Park Hedged 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 Aware are associated (or correlated) with Regents Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regents Park Hedged has no effect on the direction of IShares ESG i.e., IShares ESG and Regents Park go up and down completely randomly.
Pair Corralation between IShares ESG and Regents Park
Given the investment horizon of 90 days IShares ESG is expected to generate 1.15 times less return on investment than Regents Park. But when comparing it to its historical volatility, iShares ESG Aware is 1.17 times less risky than Regents Park. It trades about 0.11 of its potential returns per unit of risk. Regents Park Hedged is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 968.00 in Regents Park Hedged on September 1, 2024 and sell it today you would earn a total of 107.00 from holding Regents Park Hedged or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares ESG Aware vs. Regents Park Hedged
Performance |
| Timeline |
| iShares ESG Aware |
| Regents Park Hedged |
IShares ESG and Regents Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Regents Park
The main advantage of trading using opposite IShares ESG and Regents Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Regents Park 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 Regents Park will offset losses from the drop in Regents Park's long position.| IShares ESG vs. Strategy Shares NewfoundReSolve | IShares ESG vs. Eaton Vance Enhanced | IShares ESG vs. Grayscale Ethereum Mini | IShares ESG vs. Grayscale Bitcoin Mini |
| Regents Park vs. iShares ESG Aware | Regents Park vs. iShares ESG Aware | Regents Park vs. iShares ESG Aware | Regents Park 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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