Correlation Between Forstrong Global and IShares Floating
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and IShares Floating 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 Forstrong Global and IShares Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and iShares Floating Rate, you can compare the effects of market volatilities on Forstrong Global and IShares Floating 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 Forstrong Global with a short position of IShares Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and IShares Floating.
Diversification Opportunities for Forstrong Global and IShares Floating
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Forstrong and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and iShares Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Floating Rate and Forstrong Global 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 Forstrong Global Income are associated (or correlated) with IShares Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Floating Rate has no effect on the direction of Forstrong Global i.e., Forstrong Global and IShares Floating go up and down completely randomly.
Pair Corralation between Forstrong Global and IShares Floating
Assuming the 90 days trading horizon Forstrong Global Income is expected to generate 4.53 times more return on investment than IShares Floating. However, Forstrong Global is 4.53 times more volatile than iShares Floating Rate. It trades about 0.11 of its potential returns per unit of risk. iShares Floating Rate is currently generating about 0.32 per unit of risk. If you would invest 1,977 in Forstrong Global Income on August 27, 2024 and sell it today you would earn a total of 185.00 from holding Forstrong Global Income or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.59% |
| Values | Daily Returns |
Forstrong Global Income vs. iShares Floating Rate
Performance |
| Timeline |
| Forstrong Global Income |
| iShares Floating Rate |
Forstrong Global and IShares Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and IShares Floating
The main advantage of trading using opposite Forstrong Global and IShares Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, IShares Floating 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 Floating will offset losses from the drop in IShares Floating's long position.| Forstrong Global vs. iShares SPTSX 60 | Forstrong Global vs. iShares Core SP | Forstrong Global vs. iShares Core SPTSX | Forstrong Global vs. BMO Aggregate Bond |
| IShares Floating vs. Mackenzie Canadian Aggregate | IShares Floating vs. Mackenzie Core Plus | IShares Floating vs. Mackenzie Investment Grade | IShares Floating vs. Mackenzie Core Plus |
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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