Correlation Between ProShares and IShares ESG
Can any of the company-specific risk be diversified away by investing in both ProShares 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 ProShares and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and iShares ESG Aware, you can compare the effects of market volatilities on ProShares 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 ProShares with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and IShares ESG.
Diversification Opportunities for ProShares and IShares ESG
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 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 ProShares 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 ProShares 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 Aware has no effect on the direction of ProShares i.e., ProShares and IShares ESG go up and down completely randomly.
Pair Corralation between ProShares and IShares ESG
Given the investment horizon of 90 days ProShares is expected to generate 1.97 times less return on investment than IShares ESG. But when comparing it to its historical volatility, ProShares SP 500 is 1.11 times less risky than IShares ESG. It trades about 0.05 of its potential returns per unit of risk. iShares ESG Aware is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,354 in iShares ESG Aware on November 9, 2024 and sell it today you would earn a total of 643.00 from holding iShares ESG Aware or generate 27.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 78.5% |
| Values | Daily Returns |
ProShares SP 500 vs. iShares ESG Aware
Performance |
| Timeline |
| ProShares SP 500 |
| iShares ESG Aware |
ProShares and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and IShares ESG
The main advantage of trading using opposite ProShares and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares 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.| ProShares vs. iShares Core Dividend | ProShares vs. SPDR SP Dividend | ProShares vs. Invesco SP 500 | ProShares vs. Vanguard Dividend Appreciation |
| IShares ESG vs. Electric Car | IShares ESG vs. JNS Holdings Corp | IShares ESG vs. Plyzer Technologies | IShares ESG vs. Visium Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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