Correlation Between IShares 1 and IA Clarington
Can any of the company-specific risk be diversified away by investing in both IShares 1 and IA Clarington 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 1 and IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 1 5 Year and IA Clarington Floating, you can compare the effects of market volatilities on IShares 1 and IA Clarington 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 1 with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and IA Clarington.
Diversification Opportunities for IShares 1 and IA Clarington
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IFRF is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares 1 5 Year and IA Clarington Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Floating and IShares 1 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 1 5 Year are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Floating has no effect on the direction of IShares 1 i.e., IShares 1 and IA Clarington go up and down completely randomly.
Pair Corralation between IShares 1 and IA Clarington
Assuming the 90 days trading horizon iShares 1 5 Year is expected to generate 0.67 times more return on investment than IA Clarington. However, iShares 1 5 Year is 1.49 times less risky than IA Clarington. It trades about 0.19 of its potential returns per unit of risk. IA Clarington Floating is currently generating about -0.17 per unit of risk. If you would invest 1,742 in iShares 1 5 Year on November 27, 2024 and sell it today you would earn a total of 11.00 from holding iShares 1 5 Year or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares 1 5 Year vs. IA Clarington Floating
Performance |
| Timeline |
| iShares 1 5 |
| IA Clarington Floating |
IShares 1 and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 1 and IA Clarington
The main advantage of trading using opposite IShares 1 and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.| IShares 1 vs. iShares 1 5 Year | IShares 1 vs. iShares Premium Money | IShares 1 vs. iShares Canadian Government | IShares 1 vs. iShares Global Monthly |
| IA Clarington vs. IA Clarington Core | IA Clarington vs. IA Clarington Loomis | IA Clarington vs. IA Clarington Strategic | IA Clarington vs. PIMCO Investment Grade |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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