Correlation Between IShares ESG and Brendan Wood
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Brendan Wood 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 Brendan Wood 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 Brendan Wood TopGun, you can compare the effects of market volatilities on IShares ESG and Brendan Wood 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 Brendan Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Brendan Wood.
Diversification Opportunities for IShares ESG and Brendan Wood
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Brendan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Brendan Wood TopGun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brendan Wood TopGun 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 Brendan Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brendan Wood TopGun has no effect on the direction of IShares ESG i.e., IShares ESG and Brendan Wood go up and down completely randomly.
Pair Corralation between IShares ESG and Brendan Wood
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 1.04 times more return on investment than Brendan Wood. However, IShares ESG is 1.04 times more volatile than Brendan Wood TopGun. It trades about 0.14 of its potential returns per unit of risk. Brendan Wood TopGun is currently generating about 0.12 per unit of risk. If you would invest 11,497 in iShares ESG Aware on September 1, 2024 and sell it today you would earn a total of 1,775 from holding iShares ESG Aware or generate 15.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares ESG Aware vs. Brendan Wood TopGun
Performance |
| Timeline |
| iShares ESG Aware |
| Brendan Wood TopGun |
IShares ESG and Brendan Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Brendan Wood
The main advantage of trading using opposite IShares ESG and Brendan Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Brendan Wood 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 Brendan Wood will offset losses from the drop in Brendan Wood's long position.| IShares ESG vs. Vanguard Total Stock | IShares ESG vs. SPDR SP 500 | IShares ESG vs. iShares Core SP | IShares ESG vs. Vanguard Dividend Appreciation |
| Brendan Wood vs. Vanguard Total Stock | Brendan Wood vs. SPDR SP 500 | Brendan Wood vs. iShares Core SP | Brendan Wood vs. Vanguard Dividend Appreciation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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