Correlation Between IShares Core and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and IShares Canadian 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 Core and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SPTSX and iShares Canadian Universe, you can compare the effects of market volatilities on IShares Core and IShares Canadian 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 Core with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IShares Canadian.
Diversification Opportunities for IShares Core and IShares Canadian
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and iShares Canadian Universe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Universe and IShares Core 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 Core SPTSX are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian Universe has no effect on the direction of IShares Core i.e., IShares Core and IShares Canadian go up and down completely randomly.
Pair Corralation between IShares Core and IShares Canadian
Assuming the 90 days trading horizon iShares Core SPTSX is expected to under-perform the IShares Canadian. In addition to that, IShares Core is 1.93 times more volatile than iShares Canadian Universe. It trades about -0.04 of its total potential returns per unit of risk. iShares Canadian Universe is currently generating about 0.1 per unit of volatility. If you would invest 2,842 in iShares Canadian Universe on December 4, 2024 and sell it today you would earn a total of 63.00 from holding iShares Canadian Universe or generate 2.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Core SPTSX vs. iShares Canadian Universe
Performance |
Timeline |
iShares Core SPTSX |
iShares Canadian Universe |
IShares Core and IShares Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and IShares Canadian
The main advantage of trading using opposite IShares Core and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares Core SP | IShares Core vs. iShares SPTSX Composite | IShares Core vs. iShares Core MSCI |
IShares Canadian vs. iShares Canadian Short | IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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