Correlation Between IShares Canadian and Minaurum Gold

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

Diversification Opportunities for IShares Canadian and Minaurum Gold

-0.56

Correlation Coefficient

IShares Canadian  Minaurum Gold

Excellent diversification

The 3 months correlation between IShares and Minaurum is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Minaurum Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minaurum 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 Minaurum Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minaurum Gold has no effect on the direction of IShares Canadian i.e., IShares Canadian and Minaurum Gold go up and down completely randomly.

Pair Corralation between IShares Canadian and Minaurum Gold

Assuming the 90 days trading horizon IShares Canadian is expected to generate 3.87 times less return on investment than Minaurum Gold. But when comparing it to its historical volatility, iShares Canadian HYBrid is 21.36 times less risky than Minaurum Gold. It trades about 0.17 of its potential returns per unit of risk. Minaurum Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Minaurum Gold on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Minaurum Gold or generate 0.0% 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.  Minaurum Gold

iShares Canadian HYBrid

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 11 (%) 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.

Minaurum Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minaurum Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with IShares Canadian and Minaurum Gold

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

The idea behind iShares Canadian HYBrid and Minaurum Gold 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.