ESG Forecast


Bullish Case: The ESG index's historical price returns show a robust probability of positive gains over holding periods exceeding six months (source: return surface). Rising ESG adoption and favorable regulatory landscape support continued growth.


Bearish Case: Past performance data reveals short-term volatility with potential for negative returns, especially under a year (source: return surface). Regulatory uncertainties and flat recent price action further signal near-term downside risk.


Potential Outcomes:

1. Rising ESG adoption (~35%) fostering market confidence.

2. Regulatory clarity benefiting ESG (~25%).

3. Sustained market volatility impacting prices (~20%).

4. Backlash against 'greenwashing' eroding trust (~10%).

5. SEC rule challenges causing disruptions (~10%).


Trading Oracle: Implement short-term credit spreads (Helium Short Volatility) given neutral AI forecasts, flat price action, and potential ongoing regulatory uncertainties. Position hedges for 3-6 months with a bearish bias to capitalize on potential downside while minimizing long-term risk. Use high delta spreads for better reward:risk balance.


July 16, 2024


FlexShares Trust - FlexShares STOXX US ESG Select Index Forecast

ESG      FlexShares Trust - FlexShares STOXX US ESG Select Index











Correlated Assets

Assets that tend to move strongly with ESG



VOO Forecast + Options Trading Strategies   VOO  Vanguard S&P 500 (1.0)


VTI Forecast + Options Trading Strategies   VTI  Vanguard Total Stock Market (1.0)


SSO Forecast + Options Trading Strategies   SSO  ProShares Ultra S&P500 (1.0)


QQQM Forecast + Options Trading Strategies   QQQM  Invesco Exchange-Traded Fund Trust II - Invesco NASDAQ 100 (0.99)


UPRO Forecast + Options Trading Strategies   UPRO  ProShares UltraPro S&P 500 (0.99)



Uncorrelated Assets

Assets with little price relationship to ESG



HAS Forecast + Options Trading Strategies   HAS  Hasbro (-0.0)


RH Forecast + Options Trading Strategies   RH  RH - (0.0)


FSK Forecast + Options Trading Strategies   FSK  FS KKR (0.0)


AOSL Forecast + Options Trading Strategies   AOSL  Alpha & Omega Semiconductor (-0.0)


WY Forecast + Options Trading Strategies   WY  Weyerhaeuser (-0.0)



Anticorrelated Assets

Assets that tend to move strongly against ESG



VIXY Forecast + Options Trading Strategies   VIXY  ProShares VIX Short-Term Futures (-0.96)


TECS Forecast + Options Trading Strategies   TECS  Direxion Daily Technology Bear 3X Shares (-0.98)


SQQQ Forecast + Options Trading Strategies   SQQQ  ProShares UltraPro Short QQQ (-0.99)


SH Forecast + Options Trading Strategies   SH  ProShares Short S&P500 (-1.0)


SPXS Forecast + Options Trading Strategies   SPXS  Direxion Daily S&P 500 Bear 3X Shares (-1.0)





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