Correlation Between IShares ESG and US Global

Can any of the company-specific risk be diversified away by investing in both IShares ESG and US Global 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 US Global 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 US Global Jets, you can compare the effects of market volatilities on IShares ESG and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and US Global.

Diversification Opportunities for IShares ESG and US Global

0.37

Correlation Coefficient

IShares ESG  US Global

Weak diversification

The 3 months correlation between IShares and JETS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and US Global Jets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Jets 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Jets has no effect on the direction of IShares ESG i.e., IShares ESG and US Global go up and down completely randomly.

Pair Corralation between IShares ESG and US Global

Given the investment horizon of 90 days iShares ESG Aware is expected to generate 0.45 times more return on investment than US Global. However, iShares ESG Aware is 2.25 times less risky than US Global. It trades about 0.06 of its potential returns per unit of risk. US Global Jets is currently generating about -0.14 per unit of risk. If you would invest  2,860  in iShares ESG Aware on December 28, 2024 and sell it today you would earn a total of  74.00  from holding iShares ESG Aware or generate 2.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iShares ESG Aware  vs.  US Global Jets

iShares ESG Aware

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG Aware are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

US Global Jets

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Global Jets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with IShares ESG and US Global

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

The idea behind iShares ESG Aware and US Global Jets 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.