Looking to balance out your exposure to AA? The ETFs below have the lowest correlation with AA — they tend to move on their own, which can help reduce risk when AA drops. The stock ideas table highlights individual companies that behave independently from AA.
Best Diversifiers for AA
4 ETFs have low correlation with AA (below 0.3), 1 of which are negatively correlated. The least correlated is iShares 0-3 Month Treasury Bond ETF (SGOV) (Ultrashort Bond) with a 1Y correlation of -0.11, roughly unchanged from -0.06 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| iShares 0-3 Month Treasury Bond ETF | -0.11 | -0.07 | -0.06 | 100 | Ultrashort Bond | AA vs SGOV | |
| iShares MSCI Japan Small Cap ETF | 0.24 | 0.28 | 0.33 | 55 | Japan Equities | AA vs SCJ | |
| WisdomTree Japan Hedged Equity Fund | 0.26 | 0.26 | 0.33 | 90 | Japan Equities | AA vs DXJ | |
| iShares MSCI Spain ETF | 0.29 | 0.33 | 0.39 | 71 | Europe Equities | AA vs EWP | |
| Invesco QQQ ETF | 0.41 | 0.40 | 0.41 | 59 | Nasdaq-100 | AA vs QQQ |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from AA, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to AA and solid risk/return profiles. The least correlated is Consolidated Edison, Inc. (ED) (Utilities) with a 1Y correlation of -0.13, down from 0.03 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Consolidated Edison, Inc. | -0.13 | -0.02 | 0.03 | 61 | Utilities | |
| Welltower Inc. | -0.06 | 0.08 | 0.16 | 86 | Real Estate | |
| Sunoco LP | 0.02 | 0.17 | 0.25 | 77 | Energy | |
| Golar LNG Limited | 0.04 | 0.27 | 0.36 | 67 | Energy | |
| Equinor ASA | 0.05 | 0.24 | 0.34 | 66 | Energy |
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