Correlation Between SPDR SP and IShares ESG
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Health and iShares ESG Aware, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IShares ESG.
Diversification Opportunities for SPDR SP and IShares ESG
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Health and iShares ESG Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aware and SPDR SP 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 SPDR SP Health 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 Aware has no effect on the direction of SPDR SP i.e., SPDR SP and IShares ESG go up and down completely randomly.
Pair Corralation between SPDR SP and IShares ESG
Considering the 90-day investment horizon SPDR SP Health is expected to generate 2.05 times more return on investment than IShares ESG. However, SPDR SP is 2.05 times more volatile than iShares ESG Aware. It trades about 0.23 of its potential returns per unit of risk. iShares ESG Aware is currently generating about 0.17 per unit of risk. If you would invest 8,187 in SPDR SP Health on October 10, 2025 and sell it today you would earn a total of 1,045 from holding SPDR SP Health or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Health vs. iShares ESG Aware
Performance |
| Timeline |
| SPDR SP Health |
| iShares ESG Aware |
SPDR SP and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IShares ESG
The main advantage of trading using opposite SPDR SP and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. SPDR SP Transportation | SPDR SP vs. Simplify Exchange Traded | SPDR SP vs. Invesco SP SmallCap | SPDR SP vs. SPDR SP Telecom |
| IShares ESG vs. FlexShares Quality Low | IShares ESG vs. iShares Small Cap | IShares ESG vs. Principal Value ETF | IShares ESG vs. Invesco MSCI Sustainable |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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