Correlation Between BlackRock ESG and IShares STOXX
Can any of the company-specific risk be diversified away by investing in both BlackRock ESG and IShares STOXX 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 STOXX 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 STOXX Europe, you can compare the effects of market volatilities on BlackRock ESG and IShares STOXX 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 STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ESG and IShares STOXX.
Diversification Opportunities for BlackRock ESG and IShares STOXX
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlackRock and IShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ESG Multi Asset and iShares STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares STOXX Europe 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 STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares STOXX Europe has no effect on the direction of BlackRock ESG i.e., BlackRock ESG and IShares STOXX go up and down completely randomly.
Pair Corralation between BlackRock ESG and IShares STOXX
Assuming the 90 days trading horizon BlackRock ESG Multi Asset is expected to generate 0.56 times more return on investment than IShares STOXX. However, BlackRock ESG Multi Asset is 1.78 times less risky than IShares STOXX. It trades about 0.18 of its potential returns per unit of risk. iShares STOXX Europe is currently generating about -0.03 per unit of risk. If you would invest 554.00 in BlackRock ESG Multi Asset on September 3, 2024 and sell it today you would earn a total of 57.00 from holding BlackRock ESG Multi Asset or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock ESG Multi Asset vs. iShares STOXX Europe
Performance |
| Timeline |
| BlackRock ESG Multi |
| iShares STOXX Europe |
BlackRock ESG and IShares STOXX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ESG and IShares STOXX
The main advantage of trading using opposite BlackRock ESG and IShares STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ESG position performs unexpectedly, IShares STOXX 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 STOXX will offset losses from the drop in IShares STOXX'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 STOXX vs. iShares III Public | IShares STOXX vs. iShares Core MSCI | IShares STOXX vs. iShares France Govt | IShares STOXX 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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