Correlation Between Yerbae Brands and IShares ESG

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

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

Diversification Opportunities for Yerbae Brands and IShares ESG

-0.5

Correlation Coefficient

Yerbae Brands  IShares ESG

Very good diversification

The 3 months correlation between Yerbae and IShares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yerbae Brands Corp and iShares ESG MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG MSCI and Yerbae Brands 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 Yerbae Brands Corp 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 MSCI has no effect on the direction of Yerbae Brands i.e., Yerbae Brands and IShares ESG go up and down completely randomly.

Pair Corralation between Yerbae Brands and IShares ESG

Assuming the 90 days trading horizon Yerbae Brands Corp is expected to under-perform the IShares ESG. In addition to that, Yerbae Brands is 11.09 times more volatile than iShares ESG MSCI. It trades about -0.03 of its total potential returns per unit of risk. iShares ESG MSCI is currently generating about 0.13 per unit of volatility. If you would invest  2,867  in iShares ESG MSCI on October 4, 2024 and sell it today you would earn a total of  1,624  from holding iShares ESG MSCI or generate 56.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.76%
Values	Daily Returns

Yerbae Brands Corp  vs.  iShares ESG MSCI

Yerbae Brands Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yerbae Brands Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Yerbae Brands sustained solid returns over the last few months and may actually be approaching a breakup point.

iShares ESG MSCI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG MSCI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IShares ESG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Yerbae Brands and IShares ESG

The main advantage of trading using opposite Yerbae Brands and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yerbae Brands 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 Yerbae Brands Corp and iShares ESG MSCI 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.