Correlation Between Forstrong Global and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and IShares Canadian 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 Canadian 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 Canadian HYBrid, you can compare the effects of market volatilities on Forstrong Global and IShares Canadian 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 Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and IShares Canadian.
Diversification Opportunities for Forstrong Global and IShares Canadian
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forstrong and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid 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 Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of Forstrong Global i.e., Forstrong Global and IShares Canadian go up and down completely randomly.
Pair Corralation between Forstrong Global and IShares Canadian
Assuming the 90 days trading horizon Forstrong Global Income is expected to under-perform the IShares Canadian. In addition to that, Forstrong Global is 1.4 times more volatile than iShares Canadian HYBrid. It trades about -0.08 of its total potential returns per unit of risk. iShares Canadian HYBrid is currently generating about 0.03 per unit of volatility. If you would invest 1,948 in iShares Canadian HYBrid on August 24, 2024 and sell it today you would earn a total of 3.00 from holding iShares Canadian HYBrid or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forstrong Global Income vs. iShares Canadian HYBrid
Performance |
| Timeline |
| Forstrong Global Income |
| iShares Canadian HYBrid |
Forstrong Global and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and IShares Canadian
The main advantage of trading using opposite Forstrong Global and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, IShares Canadian 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 Canadian will offset losses from the drop in IShares Canadian'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 Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares 1 10Yr Laddered | IShares Canadian vs. Forstrong Global Income | IShares Canadian vs. BMO Aggregate Bond |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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