Correlation Between 6 Meridian and IShares ESG

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Can any of the company-specific risk be diversified away by investing in both 6 Meridian 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 6 Meridian and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 6 Meridian Small and iShares ESG Screened, you can compare the effects of market volatilities on 6 Meridian 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 6 Meridian with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of 6 Meridian and IShares ESG.

Diversification Opportunities for 6 Meridian and IShares ESG

SIXSISharesDiversified AwaySIXSISharesDiversified Away100%
0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between SIXS and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding 6 Meridian Small 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 6 Meridian 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 6 Meridian Small 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 6 Meridian i.e., 6 Meridian and IShares ESG go up and down completely randomly.

Pair Corralation between 6 Meridian and IShares ESG

Given the investment horizon of 90 days 6 Meridian Small is expected to generate 0.92 times more return on investment than IShares ESG. However, 6 Meridian Small is 1.09 times less risky than IShares ESG. It trades about 0.07 of its potential returns per unit of risk. iShares ESG Screened is currently generating about 0.05 per unit of risk. If you would invest  4,839  in 6 Meridian Small on October 30, 2024 and sell it today you would earn a total of  228.78  from holding 6 Meridian Small or generate 4.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

6 Meridian Small  vs.  iShares ESG Screened

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -4-20246810
JavaScript chart by amCharts 3.21.15SIXS XJR
       Timeline  
6 Meridian Small 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in 6 Meridian Small are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, 6 Meridian is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan484950515253
iShares ESG Screened 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG Screened are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking indicators, IShares ESG is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan404142434445

6 Meridian and IShares ESG Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.74-2.8-1.86-0.920.01590.941.892.853.8 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15SIXS XJR
       Returns  

Pair Trading with 6 Meridian and IShares ESG

The main advantage of trading using opposite 6 Meridian and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 6 Meridian 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 6 Meridian Small 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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