Correlation Between IShares SPTSX and CI First

Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and CI First 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 SPTSX and CI First into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares SPTSX Completion and CI First Asset, you can compare the effects of market volatilities on IShares SPTSX and CI First 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 SPTSX with a short position of CI First. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and CI First.

Diversification Opportunities for IShares SPTSX and CI First

-0.13

Correlation Coefficient

IShares SPTSX  CI First

Good diversification

The 3 months correlation between IShares and MXF is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Completion and CI First Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI First Asset and IShares SPTSX 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 SPTSX Completion are associated (or correlated) with CI First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI First Asset has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and CI First go up and down completely randomly.

Pair Corralation between IShares SPTSX and CI First

Assuming the 90 days trading horizon iShares SPTSX Completion is expected to generate 0.43 times more return on investment than CI First. However, iShares SPTSX Completion is 2.33 times less risky than CI First. It trades about -0.24 of its potential returns per unit of risk. CI First Asset is currently generating about -0.19 per unit of risk. If you would invest  3,931  in iShares SPTSX Completion on September 23, 2024 and sell it today you would lose (142.00) from holding iShares SPTSX Completion or give up 3.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

iShares SPTSX Completion  vs.  CI First Asset

iShares SPTSX Completion

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SPTSX Completion are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, IShares SPTSX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI First Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI First Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with IShares SPTSX and CI First

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

The idea behind iShares SPTSX Completion and CI First Asset 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.