Correlation Between Guardian Canadian and IShares Core
Can any of the company-specific risk be diversified away by investing in both Guardian Canadian 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 Guardian Canadian and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Canadian Bond and iShares Core Canadian, you can compare the effects of market volatilities on Guardian Canadian 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 Guardian Canadian with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Canadian and IShares Core.
Diversification Opportunities for Guardian Canadian and IShares Core
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardian and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Canadian Bond 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 Guardian Canadian 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 Guardian Canadian Bond 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 Guardian Canadian i.e., Guardian Canadian and IShares Core go up and down completely randomly.
Pair Corralation between Guardian Canadian and IShares Core
Assuming the 90 days trading horizon Guardian Canadian Bond is expected to generate 1.15 times more return on investment than IShares Core. However, Guardian Canadian is 1.15 times more volatile than iShares Core Canadian. It trades about 0.21 of its potential returns per unit of risk. iShares Core Canadian is currently generating about 0.19 per unit of risk. If you would invest 1,836 in Guardian Canadian Bond on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Guardian Canadian Bond or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Canadian Bond vs. iShares Core Canadian
Performance |
| Timeline |
| Guardian Canadian Bond |
| iShares Core Canadian |
Guardian Canadian and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Canadian and IShares Core
The main advantage of trading using opposite Guardian Canadian and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Canadian 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.| Guardian Canadian vs. iShares Core Canadian | Guardian Canadian vs. iShares Core Canadian | Guardian Canadian vs. iShares Canadian Real | Guardian Canadian vs. iShares Canadian Value |
| IShares Core vs. BMO Mid Corporate | IShares Core vs. Global X Active | IShares Core vs. iShares 1 10Yr Laddered | IShares Core vs. RBC Target 2026 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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