Correlation Between IShares ESG and Northern Trust
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Northern Trust 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 Northern Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Advanced and Northern Trust, you can compare the effects of market volatilities on IShares ESG and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Northern Trust.
Diversification Opportunities for IShares ESG and Northern Trust
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Northern is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Advanced and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Advanced are associated (or correlated) with Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of IShares ESG i.e., IShares ESG and Northern Trust go up and down completely randomly.
Pair Corralation between IShares ESG and Northern Trust
If you would invest 7,138 in iShares ESG Advanced on August 26, 2024 and sell it today you would earn a total of 1,015 from holding iShares ESG Advanced or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.37% |
| Values | Daily Returns |
iShares ESG Advanced vs. Northern Trust
Performance |
| Timeline |
| iShares ESG Advanced |
| Northern Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares ESG and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Northern Trust
The main advantage of trading using opposite IShares ESG and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust's long position.| IShares ESG vs. Senstar Technologies | IShares ESG vs. ImmuCell | IShares ESG vs. Anika Therapeutics | IShares ESG vs. Aquagold International |
| Northern Trust vs. First Trust Senior | Northern Trust vs. First Trust Low | Northern Trust vs. First Trust Enhanced | Northern Trust vs. First Trust TCW |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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