Correlation Between IShares ESG and ABIVAX Société

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

By analyzing existing cross correlation between iShares ESG Aware and ABIVAX Socit Anonyme, you can compare the effects of market volatilities on IShares ESG and ABIVAX Société 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 ABIVAX Société. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and ABIVAX Société.

Diversification Opportunities for IShares ESG and ABIVAX Société

-0.02

Correlation Coefficient

IShares ESG  ABIVAX Société

Good diversification

The 3 months correlation between IShares and ABIVAX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and ABIVAX Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIVAX Socit Anonyme 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 Aware are associated (or correlated) with ABIVAX Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIVAX Socit Anonyme has no effect on the direction of IShares ESG i.e., IShares ESG and ABIVAX Société go up and down completely randomly.

Pair Corralation between IShares ESG and ABIVAX Société

Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.14 times more return on investment than ABIVAX Société. However, iShares ESG Aware is 7.06 times less risky than ABIVAX Société. It trades about -0.07 of its potential returns per unit of risk. ABIVAX Socit Anonyme is currently generating about -0.18 per unit of risk. If you would invest  3,088  in iShares ESG Aware on November 28, 2024 and sell it today you would lose (87.00) from holding iShares ESG Aware or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

iShares ESG Aware  vs.  ABIVAX Socit Anonyme

iShares ESG Aware

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares ESG Aware has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares ESG is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ABIVAX Socit Anonyme

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABIVAX Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IShares ESG and ABIVAX Société

The main advantage of trading using opposite IShares ESG and ABIVAX Société positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, ABIVAX Société 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 ABIVAX Société will offset losses from the drop in ABIVAX Société's long position.

The idea behind iShares ESG Aware and ABIVAX Socit Anonyme 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.