Correlation Between Picton Mahoney and IShares SPTSX

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

By analyzing existing cross correlation between Picton Mahoney Fortified and iShares SPTSX 60, you can compare the effects of market volatilities on Picton Mahoney and IShares SPTSX 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 Picton Mahoney with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and IShares SPTSX.

Diversification Opportunities for Picton Mahoney and IShares SPTSX

0.0

Correlation Coefficient

Picton Mahoney  IShares SPTSX

Pay attention - limited upside

The 3 months correlation between Picton and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and iShares SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX 60 and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX 60 has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and IShares SPTSX go up and down completely randomly.

Pair Corralation between Picton Mahoney and IShares SPTSX

If you would invest  3,698  in iShares SPTSX 60 on October 26, 2024 and sell it today you would earn a total of  166.00  from holding iShares SPTSX 60 or generate 4.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Picton Mahoney Fortified  vs.  iShares SPTSX 60

Picton Mahoney Fortified

Risk-Adjusted Performance

0 of 100

Very Weak

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

iShares SPTSX 60

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SPTSX 60 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares SPTSX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Picton Mahoney and IShares SPTSX

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

The idea behind Picton Mahoney Fortified and iShares SPTSX 60 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.