Correlation Between IShares ESG and God Bless
Can any of the company-specific risk be diversified away by investing in both IShares ESG and God Bless 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 God Bless 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 God Bless America, you can compare the effects of market volatilities on IShares ESG and God Bless 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 God Bless. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and God Bless.
Diversification Opportunities for IShares ESG and God Bless
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and God is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and God Bless America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on God Bless America 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 God Bless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of God Bless America has no effect on the direction of IShares ESG i.e., IShares ESG and God Bless go up and down completely randomly.
Pair Corralation between IShares ESG and God Bless
Given the investment horizon of 90 days IShares ESG is expected to generate 1.36 times less return on investment than God Bless. But when comparing it to its historical volatility, iShares ESG Aware is 1.18 times less risky than God Bless. It trades about 0.12 of its potential returns per unit of risk. God Bless America is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,142 in God Bless America on September 5, 2024 and sell it today you would earn a total of 1,859 from holding God Bless America or generate 86.79% 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. God Bless America
Performance |
| Timeline |
| iShares ESG Aware |
| God Bless America |
IShares ESG and God Bless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and God Bless
The main advantage of trading using opposite IShares ESG and God Bless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, God Bless 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 God Bless will offset losses from the drop in God Bless' long position.| IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. Vanguard ESG Stock | IShares ESG vs. iShares MSCI USA |
| God Bless vs. Vanguard Total Stock | God Bless vs. SPDR SP 500 | God Bless vs. iShares Core SP | God Bless 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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