Correlation Between IShares Premium and CI High

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

By analyzing existing cross correlation between iShares Premium Money and CI High Interest, you can compare the effects of market volatilities on IShares Premium and CI High 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 Premium with a short position of CI High. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Premium and CI High.

Diversification Opportunities for IShares Premium and CI High

0.14

Correlation Coefficient

IShares Premium  CI High

Average diversification

The 3 months correlation between IShares and CSAV is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares Premium Money and CI High Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI High Interest and IShares Premium 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 Premium Money are associated (or correlated) with CI High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI High Interest has no effect on the direction of IShares Premium i.e., IShares Premium and CI High go up and down completely randomly.

Pair Corralation between IShares Premium and CI High

Assuming the 90 days trading horizon iShares Premium Money is expected to generate about the same return on investment as CI High Interest. However, IShares Premium is 1.12 times more volatile than CI High Interest. It trades about 0.58 of its potential returns per unit of risk. CI High Interest is currently producing about 0.66 per unit of risk. If you would invest  5,002  in CI High Interest on September 24, 2024 and sell it today you would earn a total of  12.00  from holding CI High Interest or generate 0.24% return on investment over 90 days.

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

iShares Premium Money  vs.  CI High Interest

iShares Premium Money

Risk-Adjusted Performance

65 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Premium Money are ranked lower than 65 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Premium is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI High Interest

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CI High Interest are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI High is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Premium and CI High

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

The idea behind iShares Premium Money and CI High Interest 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.