Correlation Between Regents Park and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Regents Park 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 Regents Park and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regents Park Hedged and iShares ESG Aware, you can compare the effects of market volatilities on Regents Park 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 Regents Park with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regents Park and IShares ESG.
Diversification Opportunities for Regents Park and IShares ESG
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regents and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Regents Park Hedged 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 Regents Park 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 Regents Park Hedged 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 Regents Park i.e., Regents Park and IShares ESG go up and down completely randomly.
Pair Corralation between Regents Park and IShares ESG
Given the investment horizon of 90 days Regents Park Hedged is expected to generate 1.13 times more return on investment than IShares ESG. However, Regents Park is 1.13 times more volatile than iShares ESG Aware. It trades about 0.33 of its potential returns per unit of risk. iShares ESG Aware is currently generating about 0.32 per unit of risk. If you would invest 1,033 in Regents Park Hedged on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Regents Park Hedged or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regents Park Hedged vs. iShares ESG Aware
Performance |
| Timeline |
| Regents Park Hedged |
| iShares ESG Aware |
Regents Park and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regents Park and IShares ESG
The main advantage of trading using opposite Regents Park and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regents Park 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.| Regents Park vs. Cabana Target Leading | Regents Park vs. Cabana Target Drawdown | Regents Park vs. FT Cboe Vest |
| IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Advanced |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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