Correlation Between BlackRock ESG and IShares NASDAQ
Can any of the company-specific risk be diversified away by investing in both BlackRock ESG and IShares NASDAQ 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 BlackRock ESG and IShares NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock ESG Multi Asset and iShares NASDAQ 100, you can compare the effects of market volatilities on BlackRock ESG and IShares NASDAQ 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 BlackRock ESG with a short position of IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ESG and IShares NASDAQ.
Diversification Opportunities for BlackRock ESG and IShares NASDAQ
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BlackRock and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Multi Asset and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 and BlackRock 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 BlackRock ESG Multi Asset are associated (or correlated) with IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and IShares NASDAQ go up and down completely randomly.
Pair Corralation between BlackRock ESG and IShares NASDAQ
Assuming the 90 days trading horizon BlackRock ESG is expected to generate 2.23 times less return on investment than IShares NASDAQ. But when comparing it to its historical volatility, BlackRock ESG Multi Asset is 2.12 times less risky than IShares NASDAQ. It trades about 0.1 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 63,680 in iShares NASDAQ 100 on September 3, 2024 and sell it today you would earn a total of 49,660 from holding iShares NASDAQ 100 or generate 77.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock ESG Multi Asset vs. iShares NASDAQ 100
Performance |
| Timeline |
| BlackRock ESG Multi |
| iShares NASDAQ 100 |
BlackRock ESG and IShares NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ESG and IShares NASDAQ
The main advantage of trading using opposite BlackRock ESG and IShares NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ESG position performs unexpectedly, IShares NASDAQ 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 NASDAQ will offset losses from the drop in IShares NASDAQ's long position.| BlackRock ESG vs. Vanguard SP 500 | BlackRock ESG vs. SPDR Dow Jones | BlackRock ESG vs. iShares Core MSCI | BlackRock ESG vs. iShares SP 500 |
| IShares NASDAQ vs. iShares III Public | IShares NASDAQ vs. iShares Core MSCI | IShares NASDAQ vs. iShares France Govt | IShares NASDAQ vs. iShares Edge MSCI |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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