Correlation Between IShares Canadian and BetaPro Gold
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and BetaPro Gold 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 Canadian and BetaPro Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian Universe and BetaPro Gold Bullion, you can compare the effects of market volatilities on IShares Canadian and BetaPro Gold 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 Canadian with a short position of BetaPro Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and BetaPro Gold.
Diversification Opportunities for IShares Canadian and BetaPro Gold
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and BetaPro is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and BetaPro Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Gold Bullion and IShares Canadian 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 Canadian Universe are associated (or correlated) with BetaPro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Gold Bullion has no effect on the direction of IShares Canadian i.e., IShares Canadian and BetaPro Gold go up and down completely randomly.
Pair Corralation between IShares Canadian and BetaPro Gold
Assuming the 90 days trading horizon iShares Canadian Universe is expected to generate 0.19 times more return on investment than BetaPro Gold. However, iShares Canadian Universe is 5.36 times less risky than BetaPro Gold. It trades about 0.06 of its potential returns per unit of risk. BetaPro Gold Bullion is currently generating about -0.12 per unit of risk. If you would invest 2,846 in iShares Canadian Universe on November 30, 2024 and sell it today you would earn a total of 40.00 from holding iShares Canadian Universe or generate 1.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
iShares Canadian Universe vs. BetaPro Gold Bullion
Performance |
Timeline |
iShares Canadian Universe |
BetaPro Gold Bullion |
IShares Canadian and BetaPro Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Canadian and BetaPro Gold
The main advantage of trading using opposite IShares Canadian and BetaPro Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, BetaPro Gold 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 BetaPro Gold will offset losses from the drop in BetaPro Gold's long position.IShares Canadian vs. iShares Canadian Short | IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real |
BetaPro Gold vs. BetaPro Gold Bullion | BetaPro Gold vs. BetaPro SP TSX | BetaPro Gold vs. BetaPro SPTSX Capped | BetaPro Gold vs. BetaPro Silver 2x |
Check out your portfolio center.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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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