Correlation Between IShares Canadian and Haivision Systems

Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Haivision Systems 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 Haivision Systems 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 Haivision Systems, you can compare the effects of market volatilities on IShares Canadian and Haivision Systems 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 Haivision Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Haivision Systems.

Diversification Opportunities for IShares Canadian and Haivision Systems

0.71

Correlation Coefficient

IShares Canadian  Haivision Systems

Poor diversification

The 3 months correlation between IShares and Haivision is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Haivision Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haivision Systems 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 Haivision Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haivision Systems has no effect on the direction of IShares Canadian i.e., IShares Canadian and Haivision Systems go up and down completely randomly.

Pair Corralation between IShares Canadian and Haivision Systems

Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.07 times more return on investment than Haivision Systems. However, iShares Canadian HYBrid is 14.44 times less risky than Haivision Systems. It trades about 0.08 of its potential returns per unit of risk. Haivision Systems is currently generating about -0.1 per unit of risk. If you would invest  1,973  in iShares Canadian HYBrid on October 23, 2024 and sell it today you would earn a total of  8.00  from holding iShares Canadian HYBrid or generate 0.41% return on investment over 90 days.

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

iShares Canadian HYBrid  vs.  Haivision Systems

iShares Canadian HYBrid

Risk-Adjusted Performance

9 of 100

Modest

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

Haivision Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Haivision Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Haivision Systems 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 Canadian and Haivision Systems

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

The idea behind iShares Canadian HYBrid and Haivision Systems 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.