Correlation Between CI WisdomTree and IShares Core
Can any of the company-specific risk be diversified away by investing in both CI WisdomTree 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 CI WisdomTree and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI WisdomTree Canada and iShares Core MSCI, you can compare the effects of market volatilities on CI WisdomTree 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 CI WisdomTree with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI WisdomTree and IShares Core.
Diversification Opportunities for CI WisdomTree and IShares Core
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DGRC and IShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CI WisdomTree Canada and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and CI WisdomTree 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 CI WisdomTree Canada 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 MSCI has no effect on the direction of CI WisdomTree i.e., CI WisdomTree and IShares Core go up and down completely randomly.
Pair Corralation between CI WisdomTree and IShares Core
Assuming the 90 days trading horizon CI WisdomTree Canada is expected to generate 0.94 times more return on investment than IShares Core. However, CI WisdomTree Canada is 1.06 times less risky than IShares Core. It trades about 0.07 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.01 per unit of risk. If you would invest 4,017 in CI WisdomTree Canada on August 31, 2024 and sell it today you would earn a total of 37.00 from holding CI WisdomTree Canada or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CI WisdomTree Canada vs. iShares Core MSCI
Performance |
| Timeline |
| CI WisdomTree Canada |
| iShares Core MSCI |
CI WisdomTree and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI WisdomTree and IShares Core
The main advantage of trading using opposite CI WisdomTree and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI WisdomTree 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.| CI WisdomTree vs. iShares Core MSCI | CI WisdomTree vs. SPDR Portfolio Emerging | CI WisdomTree vs. SPDR Portfolio SP | CI WisdomTree vs. iShares Canadian Short |
| IShares Core vs. Vanguard FTSE Emerging | IShares Core vs. Vanguard FTSE Developed | IShares Core vs. Vanguard Total Market | IShares Core vs. Vanguard Canadian Aggregate |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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