Correlation Between IShares ESG and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Strategy Shares 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 Strategy Shares 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 Strategy Shares, you can compare the effects of market volatilities on IShares ESG and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Strategy Shares.
Diversification Opportunities for IShares ESG and Strategy Shares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Strategy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of IShares ESG i.e., IShares ESG and Strategy Shares go up and down completely randomly.
Pair Corralation between IShares ESG and Strategy Shares
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.77 times more return on investment than Strategy Shares. However, iShares ESG Aware is 1.31 times less risky than Strategy Shares. It trades about 0.26 of its potential returns per unit of risk. Strategy Shares is currently generating about 0.07 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. Strategy Shares
Performance |
| Timeline |
| iShares ESG Aware |
| Strategy Shares |
IShares ESG and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Strategy Shares
The main advantage of trading using opposite IShares ESG and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| IShares ESG vs. Electric Car | IShares ESG vs. JNS Holdings Corp | IShares ESG vs. Plyzer Technologies | IShares ESG vs. Visium Technologies |
| Strategy Shares vs. JPMorgan Fundamental Data | Strategy Shares vs. Davis Select International | Strategy Shares vs. Dimensional ETF Trust | Strategy Shares 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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