Correlation Between IShares JP and BlackRock ESG

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

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

Diversification Opportunities for IShares JP and BlackRock ESG

0.44

Correlation Coefficient

IShares JP  BlackRock ESG

Very weak diversification

The 3 months correlation between IShares and BlackRock is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and BlackRock ESG Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Multi and IShares JP 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 JP Morgan are associated (or correlated) with BlackRock ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Multi has no effect on the direction of IShares JP i.e., IShares JP and BlackRock ESG go up and down completely randomly.

Pair Corralation between IShares JP and BlackRock ESG

Assuming the 90 days trading horizon iShares JP Morgan is expected to generate 0.95 times more return on investment than BlackRock ESG. However, iShares JP Morgan is 1.06 times less risky than BlackRock ESG. It trades about 0.15 of its potential returns per unit of risk. BlackRock ESG Multi Asset is currently generating about 0.09 per unit of risk. If you would invest  3,269  in iShares JP Morgan on October 26, 2024 and sell it today you would earn a total of  133.00  from holding iShares JP Morgan or generate 4.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

iShares JP Morgan  vs.  BlackRock ESG Multi Asset

iShares JP Morgan

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares JP Morgan are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares JP is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BlackRock ESG Multi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ESG Multi Asset are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock ESG is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares JP and BlackRock ESG

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

The idea behind iShares JP Morgan and BlackRock ESG Multi Asset 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.