Correlation Between BetaPro NASDAQ and IShares ESG
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ 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 NASDAQ 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 NASDAQ 100 2x and iShares ESG Aware, you can compare the effects of market volatilities on BetaPro NASDAQ 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 NASDAQ with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and IShares ESG.
Diversification Opportunities for BetaPro NASDAQ and IShares ESG
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BetaPro and IShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and iShares ESG Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aware and BetaPro NASDAQ 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 NASDAQ 100 2x 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 Aware has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and IShares ESG go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and IShares ESG
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the IShares ESG. In addition to that, BetaPro NASDAQ is 2.64 times more volatile than iShares ESG Aware. It trades about -0.05 of its total potential returns per unit of risk. iShares ESG Aware is currently generating about -0.06 per unit of volatility. If you would invest 3,093 in iShares ESG Aware on November 28, 2024 and sell it today you would lose (28.00) from holding iShares ESG Aware or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. iShares ESG Aware
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| iShares ESG Aware |
BetaPro NASDAQ and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and IShares ESG
The main advantage of trading using opposite BetaPro NASDAQ and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ 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 NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
| IShares ESG vs. iShares ESG MSCI | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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