Correlation Between IShares ESG and Macquarie Focused
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Macquarie Focused 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 Macquarie Focused 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 Macquarie Focused Emerging, you can compare the effects of market volatilities on IShares ESG and Macquarie Focused 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 Macquarie Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Macquarie Focused.
Diversification Opportunities for IShares ESG and Macquarie Focused
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Macquarie is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Macquarie Focused Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Focused 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 Macquarie Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Focused has no effect on the direction of IShares ESG i.e., IShares ESG and Macquarie Focused go up and down completely randomly.
Pair Corralation between IShares ESG and Macquarie Focused
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.84 times more return on investment than Macquarie Focused. However, iShares ESG Aware is 1.19 times less risky than Macquarie Focused. It trades about -0.1 of its potential returns per unit of risk. Macquarie Focused Emerging is currently generating about -0.17 per unit of risk. If you would invest 3,535 in iShares ESG Aware on September 2, 2024 and sell it today you would lose (81.00) from holding iShares ESG Aware or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. Macquarie Focused Emerging
Performance |
| Timeline |
| iShares ESG Aware |
| Macquarie Focused |
IShares ESG and Macquarie Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Macquarie Focused
The main advantage of trading using opposite IShares ESG and Macquarie Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Macquarie Focused 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 Macquarie Focused will offset losses from the drop in Macquarie Focused's long position.| IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG USD |
| Macquarie Focused vs. Direxion Daily MSCI | Macquarie Focused vs. Innovator MSCI Emerging | Macquarie Focused vs. Innovator ETFs Trust | Macquarie Focused vs. Innovator MSCI Emerging |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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