Correlation Between IShares ESG and DBX ETF
Can any of the company-specific risk be diversified away by investing in both IShares ESG and DBX ETF 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 DBX ETF 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 DBX ETF Trust, you can compare the effects of market volatilities on IShares ESG and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and DBX ETF.
Diversification Opportunities for IShares ESG and DBX ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and DBX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF 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 Aware are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of IShares ESG i.e., IShares ESG and DBX ETF go up and down completely randomly.
Pair Corralation between IShares ESG and DBX ETF
Given the investment horizon of 90 days IShares ESG is expected to generate 1.53 times less return on investment than DBX ETF. In addition to that, IShares ESG is 1.74 times more volatile than DBX ETF Trust. It trades about 0.2 of its total potential returns per unit of risk. DBX ETF Trust is currently generating about 0.53 per unit of volatility. If you would invest 5,196 in DBX ETF Trust on November 2, 2024 and sell it today you would earn a total of 277.00 from holding DBX ETF Trust or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. DBX ETF Trust
Performance |
| Timeline |
| iShares ESG Aware |
| DBX ETF Trust |
IShares ESG and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and DBX ETF
The main advantage of trading using opposite IShares ESG and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| IShares ESG vs. Xtrackers MSCI USA | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares MSCI USA |
| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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