Correlation Between Vanguard ESG and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Vanguard ESG 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 Vanguard ESG and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard ESG Corporate and iShares ESG USD, you can compare the effects of market volatilities on Vanguard ESG 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 Vanguard ESG with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard ESG and IShares ESG.
Diversification Opportunities for Vanguard ESG and IShares ESG
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and IShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard ESG Corporate and iShares ESG USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG USD and Vanguard 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 Vanguard ESG Corporate 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 USD has no effect on the direction of Vanguard ESG i.e., Vanguard ESG and IShares ESG go up and down completely randomly.
Pair Corralation between Vanguard ESG and IShares ESG
Given the investment horizon of 90 days Vanguard ESG Corporate is expected to generate 0.96 times more return on investment than IShares ESG. However, Vanguard ESG Corporate is 1.04 times less risky than IShares ESG. It trades about 0.06 of its potential returns per unit of risk. iShares ESG USD is currently generating about 0.05 per unit of risk. If you would invest 6,218 in Vanguard ESG Corporate on March 29, 2025 and sell it today you would earn a total of 104.00 from holding Vanguard ESG Corporate or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard ESG Corporate vs. iShares ESG USD
Performance |
| Timeline |
| Vanguard ESG Corporate |
| iShares ESG USD |
Vanguard ESG and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard ESG and IShares ESG
The main advantage of trading using opposite Vanguard ESG and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard ESG 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.| Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard Total Corporate | Vanguard ESG vs. Vanguard Ultra Short Bond |
| IShares ESG vs. iShares Short Maturity | IShares ESG vs. iShares BB Rated | IShares ESG vs. iShares Edge High | IShares ESG vs. iShares Interest Rate |
Check out your portfolio center.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |