Correlation Between IShares ESG and Fidelity Global

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

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

Diversification Opportunities for IShares ESG and Fidelity Global

0.93

Correlation Coefficient

IShares ESG  Fidelity Global

Almost no diversification

The 3 months correlation between IShares and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Conservative and Fidelity Global Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Monthly and IShares 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 iShares ESG Conservative are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Monthly has no effect on the direction of IShares ESG i.e., IShares ESG and Fidelity Global go up and down completely randomly.

Pair Corralation between IShares ESG and Fidelity Global

Assuming the 90 days trading horizon iShares ESG Conservative is expected to generate 1.88 times more return on investment than Fidelity Global. However, IShares ESG is 1.88 times more volatile than Fidelity Global Monthly. It trades about 0.25 of its potential returns per unit of risk. Fidelity Global Monthly is currently generating about 0.29 per unit of risk. If you would invest  4,361  in iShares ESG Conservative on April 24, 2025 and sell it today you would earn a total of  439.00  from holding iShares ESG Conservative or generate 10.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares ESG Conservative  vs.  Fidelity Global Monthly

iShares ESG Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG Conservative are ranked lower than 20 (%) 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 August 2025.

Fidelity Global Monthly

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Monthly are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fidelity Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares ESG and Fidelity Global

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

The idea behind iShares ESG Conservative and Fidelity Global Monthly 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.