Correlation Between Desjardins and IShares Core
Can any of the company-specific risk be diversified away by investing in both Desjardins and IShares Core 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 Desjardins and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desjardins 1 5 Year and iShares Core Canadian, you can compare the effects of market volatilities on Desjardins and IShares Core 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 Desjardins with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desjardins and IShares Core.
Diversification Opportunities for Desjardins and IShares Core
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Desjardins and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Desjardins 1 5 Year and iShares Core Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Canadian and Desjardins 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 Desjardins 1 5 Year are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Canadian has no effect on the direction of Desjardins i.e., Desjardins and IShares Core go up and down completely randomly.
Pair Corralation between Desjardins and IShares Core
Assuming the 90 days trading horizon Desjardins is expected to generate 1.31 times less return on investment than IShares Core. In addition to that, Desjardins is 1.03 times more volatile than iShares Core Canadian. It trades about 0.15 of its total potential returns per unit of risk. iShares Core Canadian is currently generating about 0.2 per unit of volatility. If you would invest 1,844 in iShares Core Canadian on November 28, 2024 and sell it today you would earn a total of 68.00 from holding iShares Core Canadian or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desjardins 1 5 Year vs. iShares Core Canadian
Performance |
| Timeline |
| Desjardins 1 5 |
| iShares Core Canadian |
Desjardins and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desjardins and IShares Core
The main advantage of trading using opposite Desjardins and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desjardins position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| Desjardins vs. Desjardins American Equity | Desjardins vs. Desjardins RI Canada | Desjardins vs. Desjardins RI Canada | Desjardins vs. Desjardins Canadian Corporate |
| IShares Core vs. Vanguard Total Market | IShares Core vs. iShares Floating Rate | IShares Core vs. iShares High Quality | IShares Core vs. iShares 1 10Yr Laddered |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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