Correlation Between IShares Canadian and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Centerra 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 Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and Centerra Gold, you can compare the effects of market volatilities on IShares Canadian and Centerra 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Centerra Gold.
Diversification Opportunities for IShares Canadian and Centerra Gold
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Centerra is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 HYBrid are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of IShares Canadian i.e., IShares Canadian and Centerra Gold go up and down completely randomly.
Pair Corralation between IShares Canadian and Centerra Gold
Assuming the 90 days trading horizon IShares Canadian is expected to generate 2.68 times less return on investment than Centerra Gold. But when comparing it to its historical volatility, iShares Canadian HYBrid is 6.52 times less risky than Centerra Gold. It trades about 0.11 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 569.00 in Centerra Gold on October 5, 2024 and sell it today you would earn a total of 280.00 from holding Centerra Gold or generate 49.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Canadian HYBrid vs. Centerra Gold
Performance |
Timeline |
iShares Canadian HYBrid |
Centerra Gold |
IShares Canadian and Centerra Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Canadian and Centerra Gold
The main advantage of trading using opposite IShares Canadian and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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