Correlation Between Nushares ETF and FlexShares ESG
Can any of the company-specific risk be diversified away by investing in both Nushares ETF and FlexShares 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 Nushares ETF and FlexShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nushares ETF Trust and FlexShares ESG Climate, you can compare the effects of market volatilities on Nushares ETF and FlexShares 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 Nushares ETF with a short position of FlexShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nushares ETF and FlexShares ESG.
Diversification Opportunities for Nushares ETF and FlexShares ESG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nushares and FlexShares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nushares ETF Trust and FlexShares ESG Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares ESG Climate and Nushares ETF 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 Nushares ETF Trust are associated (or correlated) with FlexShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares ESG Climate has no effect on the direction of Nushares ETF i.e., Nushares ETF and FlexShares ESG go up and down completely randomly.
Pair Corralation between Nushares ETF and FlexShares ESG
Given the investment horizon of 90 days Nushares ETF Trust is expected to generate 1.76 times more return on investment than FlexShares ESG. However, Nushares ETF is 1.76 times more volatile than FlexShares ESG Climate. It trades about 0.1 of its potential returns per unit of risk. FlexShares ESG Climate is currently generating about 0.06 per unit of risk. If you would invest 2,401 in Nushares ETF Trust on August 26, 2024 and sell it today you would earn a total of 657.00 from holding Nushares ETF Trust or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nushares ETF Trust vs. FlexShares ESG Climate
Performance |
| Timeline |
| Nushares ETF Trust |
| FlexShares ESG Climate |
Nushares ETF and FlexShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nushares ETF and FlexShares ESG
The main advantage of trading using opposite Nushares ETF and FlexShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nushares ETF position performs unexpectedly, FlexShares 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 FlexShares ESG will offset losses from the drop in FlexShares ESG's long position.| Nushares ETF vs. BlackRock ETF Trust | Nushares ETF vs. Rbb Fund | Nushares ETF vs. Virtus ETF Trust | Nushares ETF vs. Amplify CWP Enhanced |
| FlexShares ESG vs. iShares ESG Advanced | FlexShares ESG vs. FlexShares ESG Climate | FlexShares ESG vs. FlexShares ESG Climate | FlexShares ESG vs. Franklin Liberty Investment |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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