Correlation Between Altagas Cum and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Altagas Cum and IShares SPTSX 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 Altagas Cum and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altagas Cum Red and iShares SPTSX Canadian, you can compare the effects of market volatilities on Altagas Cum and IShares SPTSX 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 Altagas Cum with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and IShares SPTSX.
Diversification Opportunities for Altagas Cum and IShares SPTSX
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altagas and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and iShares SPTSX Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Canadian and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Canadian has no effect on the direction of Altagas Cum i.e., Altagas Cum and IShares SPTSX go up and down completely randomly.
Pair Corralation between Altagas Cum and IShares SPTSX
Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 2.48 times more return on investment than IShares SPTSX. However, Altagas Cum is 2.48 times more volatile than iShares SPTSX Canadian. It trades about 0.35 of its potential returns per unit of risk. iShares SPTSX Canadian is currently generating about 0.27 per unit of risk. If you would invest 1,850 in Altagas Cum Red on August 31, 2024 and sell it today you would earn a total of 112.00 from holding Altagas Cum Red or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altagas Cum Red vs. iShares SPTSX Canadian
Performance |
| Timeline |
| Altagas Cum Red |
| iShares SPTSX Canadian |
Altagas Cum and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altagas Cum and IShares SPTSX
The main advantage of trading using opposite Altagas Cum and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, IShares SPTSX 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 SPTSX will offset losses from the drop in IShares SPTSX's long position.| Altagas Cum vs. Andlauer Healthcare Gr | Altagas Cum vs. Leveljump Healthcare Corp | Altagas Cum vs. Reliq Health Technologies | Altagas Cum vs. NeXGold Mining Corp |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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