Looking to balance out your exposure to AA? The ETFs below have historically moved differently from AA, which may reduce portfolio volatility when combined in a suitable allocation. The stock ideas table highlights individual companies with the same low-correlation characteristics. Correlation can change and does not guarantee that one asset will rise when another falls.
Best Diversifiers for AA
3 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.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| iShares 0-3 Month Treasury Bond ETF | -0.11 | -0.06 | -0.06 | 100 | Ultrashort Bond | AA vs SGOV | |
| iShares MSCI Japan Small Cap ETF | 0.24 | 0.28 | 0.33 | 68 | Japan Equities, Asia Pacific Equities | AA vs SCJ | |
| WisdomTree Japan Hedged Equity Fund | 0.29 | 0.27 | 0.33 | 93 | Japan Equities, Asia Pacific Equities | AA vs DXJ | |
| iShares MSCI Spain ETF | 0.30 | 0.34 | 0.38 | 88 | Europe Equities | AA vs EWP | |
| iShares International Developed Small Cap Value Fa... | 0.40 | 0.48 | 0.51 | 78 | Small Cap Value Equities | AA vs ISVL |
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Low-Correlation Stock Ideas
The table shows companies with at least $1B in market capitalization, historical correlation data for AA, and a Risk / Return Rank of 50 or higher. Treat them as research candidates rather than evidence that they will offset a future decline. The least correlated is Consolidated Edison, Inc. (ED) (Utilities) with a 1Y correlation of -0.18, down from 0.04 over 5 years.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Consolidated Edison, Inc. | -0.18 | -0.05 | 0.04 | 59 | Utilities | |
| Welltower Inc. | -0.11 | 0.05 | 0.14 | 89 | Real Estate | |
| Cheniere Energy, Inc. | -0.08 | 0.13 | 0.27 | 57 | Energy | |
| Walmart Inc. | -0.08 | 0.00 | 0.07 | 62 | Consumer Defensive | |
| Berkshire Hathaway Inc. | -0.05 | 0.14 | 0.28 | 61 | Financial Services |
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