Correlation Between ANT and IShares ESG

Can any of the company-specific risk be diversified away by investing in both ANT 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 ANT and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and iShares ESG Screened, you can compare the effects of market volatilities on ANT 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 ANT with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and IShares ESG.

Diversification Opportunities for ANT and IShares ESG

0.27

Correlation Coefficient

ANT  IShares ESG

Modest diversification

The 3 months correlation between ANT and IShares is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ANT and iShares ESG Screened in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Screened and ANT 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 ANT 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 Screened has no effect on the direction of ANT i.e., ANT and IShares ESG go up and down completely randomly.

Pair Corralation between ANT and IShares ESG

Assuming the 90 days trading horizon ANT is expected to generate 13.66 times more return on investment than IShares ESG. However, ANT is 13.66 times more volatile than iShares ESG Screened. It trades about 0.06 of its potential returns per unit of risk. iShares ESG Screened is currently generating about -0.09 per unit of risk. If you would invest  147.00  in ANT on December 19, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

ANT  vs.  iShares ESG Screened

ANT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares ESG Screened

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares ESG Screened has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking indicators, IShares ESG is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ANT and IShares ESG

The main advantage of trading using opposite ANT and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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.

The idea behind ANT and iShares ESG Screened pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.