Correlation Between BetaPro SP and IShares ESG
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 BetaPro SP and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and iShares ESG Balanced, you can compare the effects of market volatilities on BetaPro SP 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 BetaPro SP with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and IShares ESG.
Diversification Opportunities for BetaPro SP and IShares ESG
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and IShares is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and iShares ESG Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Balanced and BetaPro SP 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 BetaPro SP 500 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 Balanced has no effect on the direction of BetaPro SP i.e., BetaPro SP and IShares ESG go up and down completely randomly.
Pair Corralation between BetaPro SP and IShares ESG
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the IShares ESG. In addition to that, BetaPro SP is 1.94 times more volatile than iShares ESG Balanced. It trades about -0.3 of its total potential returns per unit of risk. iShares ESG Balanced is currently generating about 0.39 per unit of volatility. If you would invest 5,050 in iShares ESG Balanced on September 1, 2024 and sell it today you would earn a total of 185.00 from holding iShares ESG Balanced or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BetaPro SP 500 vs. iShares ESG Balanced
Performance |
| Timeline |
| BetaPro SP 500 |
| iShares ESG Balanced |
BetaPro SP and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and IShares ESG
The main advantage of trading using opposite BetaPro SP and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
| IShares ESG vs. Vanguard Growth Portfolio | IShares ESG vs. iShares Core Balanced | IShares ESG vs. Vanguard All Equity ETF | IShares ESG vs. iShares Core Growth |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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