Correlation Between IShares ESG and IShares Consumer
Can any of the company-specific risk be diversified away by investing in both IShares ESG and IShares Consumer 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 Consumer 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 Consumer Staples, you can compare the effects of market volatilities on IShares ESG and IShares Consumer 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 Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and IShares Consumer.
Diversification Opportunities for IShares ESG and IShares Consumer
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and iShares Consumer Staples in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Consumer Staples 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 Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Consumer Staples has no effect on the direction of IShares ESG i.e., IShares ESG and IShares Consumer go up and down completely randomly.
Pair Corralation between IShares ESG and IShares Consumer
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 1.07 times more return on investment than IShares Consumer. However, IShares ESG is 1.07 times more volatile than iShares Consumer Staples. It trades about 0.07 of its potential returns per unit of risk. iShares Consumer Staples is currently generating about 0.02 per unit of risk. If you would invest 2,447 in iShares ESG Aware on August 27, 2024 and sell it today you would earn a total of 627.00 from holding iShares ESG Aware or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.14% |
| Values | Daily Returns |
iShares ESG Aware vs. iShares Consumer Staples
Performance |
| Timeline |
| iShares ESG Aware |
| iShares Consumer Staples |
IShares ESG and IShares Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and IShares Consumer
The main advantage of trading using opposite IShares ESG and IShares Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, IShares Consumer 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 Consumer will offset losses from the drop in IShares Consumer'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 Consumer vs. Vanguard Consumer Discretionary | IShares Consumer vs. Vanguard Utilities Index | IShares Consumer vs. Vanguard Industrials Index | IShares Consumer vs. Vanguard Materials Index |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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