Correlation Between IShares Fundamental and Mawer Canadien

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

By analyzing existing cross correlation between iShares Fundamental Hedged and Mawer Canadien obligations, you can compare the effects of market volatilities on IShares Fundamental and Mawer Canadien 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 Fundamental with a short position of Mawer Canadien. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fundamental and Mawer Canadien.

Diversification Opportunities for IShares Fundamental and Mawer Canadien

0.16

Correlation Coefficient

IShares Fundamental  Mawer Canadien

Average diversification

The 3 months correlation between IShares and Mawer is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fundamental Hedged and Mawer Canadien obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Canadien oblig and IShares Fundamental 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 Fundamental Hedged are associated (or correlated) with Mawer Canadien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Canadien oblig has no effect on the direction of IShares Fundamental i.e., IShares Fundamental and Mawer Canadien go up and down completely randomly.

Pair Corralation between IShares Fundamental and Mawer Canadien

Assuming the 90 days trading horizon iShares Fundamental Hedged is expected to generate 1.95 times more return on investment than Mawer Canadien. However, IShares Fundamental is 1.95 times more volatile than Mawer Canadien obligations. It trades about 0.01 of its potential returns per unit of risk. Mawer Canadien obligations is currently generating about -0.04 per unit of risk. If you would invest  5,426  in iShares Fundamental Hedged on September 26, 2024 and sell it today you would earn a total of  18.00  from holding iShares Fundamental Hedged or generate 0.33% return on investment over 90 days.

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

iShares Fundamental Hedged  vs.  Mawer Canadien obligations

iShares Fundamental

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days iShares Fundamental Hedged has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Fundamental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mawer Canadien oblig

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mawer Canadien obligations has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Mawer Canadien is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Fundamental and Mawer Canadien

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

The idea behind iShares Fundamental Hedged and Mawer Canadien obligations 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.