Correlation Between IShares Canadian and Snipp Interactive

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

Diversification Opportunities for IShares Canadian and Snipp Interactive

-0.33

Correlation Coefficient

IShares Canadian  Snipp Interactive

Very good diversification

The 3 months correlation between IShares and Snipp is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Snipp Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snipp Interactive 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 Snipp Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snipp Interactive has no effect on the direction of IShares Canadian i.e., IShares Canadian and Snipp Interactive go up and down completely randomly.

Pair Corralation between IShares Canadian and Snipp Interactive

Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.05 times more return on investment than Snipp Interactive. However, iShares Canadian HYBrid is 20.8 times less risky than Snipp Interactive. It trades about 0.17 of its potential returns per unit of risk. Snipp Interactive is currently generating about -0.06 per unit of risk. If you would invest  1,951  in iShares Canadian HYBrid on December 4, 2024 and sell it today you would earn a total of  57.00  from holding iShares Canadian HYBrid or generate 2.92% return on investment over 90 days.

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

iShares Canadian HYBrid  vs.  Snipp Interactive

iShares Canadian HYBrid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 13 (%) 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.

Snipp Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Snipp Interactive 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 April 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 Snipp Interactive

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

The idea behind iShares Canadian HYBrid and Snipp Interactive 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.