Correlation Between Harvest Diversified and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Harvest Diversified and IShares ESG 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 Harvest Diversified and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Diversified Monthly and iShares ESG Growth, you can compare the effects of market volatilities on Harvest Diversified and IShares ESG 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 Harvest Diversified with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Diversified and IShares ESG.
Diversification Opportunities for Harvest Diversified and IShares ESG
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harvest and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Diversified Monthly and iShares ESG Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Growth and Harvest Diversified 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 Harvest Diversified Monthly are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Growth has no effect on the direction of Harvest Diversified i.e., Harvest Diversified and IShares ESG go up and down completely randomly.
Pair Corralation between Harvest Diversified and IShares ESG
Assuming the 90 days trading horizon Harvest Diversified Monthly is expected to under-perform the IShares ESG. In addition to that, Harvest Diversified is 1.32 times more volatile than iShares ESG Growth. It trades about -0.07 of its total potential returns per unit of risk. iShares ESG Growth is currently generating about 0.29 per unit of volatility. If you would invest 5,747 in iShares ESG Growth on September 19, 2024 and sell it today you would earn a total of 158.00 from holding iShares ESG Growth or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harvest Diversified Monthly vs. iShares ESG Growth
Performance |
| Timeline |
| Harvest Diversified |
| iShares ESG Growth |
Harvest Diversified and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvest Diversified and IShares ESG
The main advantage of trading using opposite Harvest Diversified and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Diversified position performs unexpectedly, IShares ESG 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 ESG will offset losses from the drop in IShares ESG's long position.The idea behind Harvest Diversified Monthly and iShares ESG Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| IShares ESG vs. Harvest Diversified Monthly | IShares ESG vs. Hamilton Canadian Financials | IShares ESG vs. Hamilton Enhanced Covered | IShares ESG vs. Hamilton Enhanced Multi Sector |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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