Correlation Between IShares ESG and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares ESG and IShares 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 IShares Trust 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 iShares Trust , you can compare the effects of market volatilities on IShares ESG and IShares 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and IShares Trust.
Diversification Opportunities for IShares ESG and IShares Trust
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and IShares is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares ESG i.e., IShares ESG and IShares Trust go up and down completely randomly.
Pair Corralation between IShares ESG and IShares Trust
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.5 times more return on investment than IShares Trust. However, iShares ESG Aware is 2.0 times less risky than IShares Trust. It trades about 0.26 of its potential returns per unit of risk. iShares Trust is currently generating about -0.04 per unit of risk. If you would invest 2,888 in iShares ESG Aware on November 5, 2024 and sell it today you would earn a total of 107.00 from holding iShares ESG Aware or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. iShares Trust
Performance |
| Timeline |
| iShares ESG Aware |
| iShares Trust |
IShares ESG and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and IShares Trust
The main advantage of trading using opposite IShares ESG and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, IShares 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| IShares ESG vs. Electric Car | IShares ESG vs. JNS Holdings Corp | IShares ESG vs. Plyzer Technologies | IShares ESG vs. Visium Technologies |
| IShares Trust vs. JPMorgan Fundamental Data | IShares Trust vs. Davis Select International | IShares Trust vs. Dimensional ETF Trust | IShares Trust vs. Principal Value ETF |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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