Correlation Between IShares ESG and Invesco NASDAQ
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Invesco 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 IShares ESG and Invesco NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG USD and Invesco NASDAQ Future, you can compare the effects of market volatilities on IShares ESG and Invesco 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 IShares ESG with a short position of Invesco NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Invesco NASDAQ.
Diversification Opportunities for IShares ESG and Invesco NASDAQ
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Invesco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG USD and Invesco NASDAQ Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco NASDAQ Future and IShares 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 iShares ESG USD are associated (or correlated) with Invesco NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco NASDAQ Future has no effect on the direction of IShares ESG i.e., IShares ESG and Invesco NASDAQ go up and down completely randomly.
Pair Corralation between IShares ESG and Invesco NASDAQ
Given the investment horizon of 90 days IShares ESG is expected to generate 1.11 times less return on investment than Invesco NASDAQ. But when comparing it to its historical volatility, iShares ESG USD is 4.1 times less risky than Invesco NASDAQ. It trades about 0.06 of its potential returns per unit of risk. Invesco NASDAQ Future is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,884 in Invesco NASDAQ Future on September 12, 2024 and sell it today you would earn a total of 144.00 from holding Invesco NASDAQ Future or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG USD vs. Invesco NASDAQ Future
Performance |
| Timeline |
| iShares ESG USD |
| Invesco NASDAQ Future |
IShares ESG and Invesco NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Invesco NASDAQ
The main advantage of trading using opposite IShares ESG and Invesco NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Invesco 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 Invesco NASDAQ will offset losses from the drop in Invesco NASDAQ's long position.| IShares ESG vs. VanEck Vectors Moodys | IShares ESG vs. BondBloxx ETF Trust | IShares ESG vs. Vanguard ESG Corporate | IShares ESG vs. Vanguard Intermediate Term Corporate |
| Invesco NASDAQ vs. iShares ESG Aware | Invesco NASDAQ vs. iShares ESG Aware | Invesco NASDAQ vs. iShares ESG 1 5 | Invesco NASDAQ vs. iShares ESG USD |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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