Mag 7 Stocks: ESG Forecasts, Signals & Technical Charts
Where are the ESG ratings for the Mag 7 forecast to go? Get the report here.
Short Signals: ESG Investing Goes Mainstream
Environmental, Social, and Governance (ESG) signals have been identified as strong indicators of potential downturns in stock values, making certain stocks attractive targets for short-selling. Conor Platt, CEO of Confluence Analytics, and Rob Yates, OWL ESG's Director of Communications, have delved into this correlation in their recent 3Q23 Short Report. Harnessing data from OWL ESG, Confluence Analytics' Short Model portfolio revealed impressive results, yielding approximately 1500 bps returns year-to-date. The report pinpoints two specific ESG signals - corporate carbon emissions and a ranking in the bottom half of the “Social” category for the US Large Cap universe - as particularly predictive.
What to Short Next for 3Q23 2023?
In 2023, ESG Signals have proven their worth by generating significant alpha of around 1500 basis points in the realm of US Large Caps. They accurately pinpointed short opportunities, particularly in the banking sector, right from the start of the year. During the second quarter, their focus shifted to the media industry. As we move into the third quarter, a fresh signal has emerged, highlighting a varied range of companies to monitor for potential downside risk. In our analysis, we delve into the success of these signals and revisit noteworthy insights from the year's earlier publications.
ESG & Carbon Signals 2Q23 2023
Recent market analysis has revealed intriguing trends in the realm of ESG. Surprisingly, lower-ranked ESG stocks, particularly those without a specific carbon focus, have exhibited stronger overall performance compared to their higher-ranked counterparts.
What is the Relationship Between Yield & Emissions?
A Look at Dividend ETFs & Net Zero Cost
A look back at the 1st quarter through our Signals.
We present a collection of longs and shorts from US Large Cap universe based on long standing factors of alpha.
We also shine a light on our newest signal, Carbon Signal 3. We demonstrate how a portfolio constructed on that factor alone can outperform the benchmark.
Should we be ignoring Scope 3 emissions?
Measuring Scope 3 emissions is challenging due to their complexity. Confluence Analytics has developed an innovative pricing approach that incorporates emissions in portfolio construction, offering a direct and profitable path to net zero investing. Their ESG signals focus on identifying relationships between residual returns and changes in ESG and carbon data.
Read more here: https://owlesg.com/2023/04/21/the-case-for-ignoring-scope-3-emissions/
Which Industry to Short Next?
After highlighting the banking sector in our ESG Short Signal Model, we focus on the Media Sector.
The short candidates that look like there is more room to fall are $NWSA and $LYV.
The shorts that appear will be covered or outright longs before quarter end would be $META and $NFLX.
Cost of Carbon: Sustainability 2.0
#Netzero investing is achievable. Find out how much it costs to offset the emissions of the major market benchmarks. See how that is ushering in a new wave of sustainable investing.
Using ESG Signals to Short
We examined the performance of ESG Factors and Signals over 3 years on the US and European equities and focused into the factors that have underperformed.
2022 European ESG Signals Review
The performance of ESG Factors driving the European markets for 2022. We also highlight a newly introduced signal that combines ESG and Carbon metrics to make better risk adjusted projections.
2022 U.S. ESG Signals Review
A look back at the performance of our ESG ranks and signals for 2022 in the Large Cap US Market. We highlight a newly introduced signal that combines ESG and Carbon metrics to make better risk adjusted projections.
