Correlation Between Global X and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Canadian and iShares Canadian Universe, you can compare the effects of market volatilities on Global X 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 Global X with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares Canadian.
Diversification Opportunities for Global X and IShares Canadian
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Global and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global X Canadian and iShares Canadian Universe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Universe and Global X 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 Global X Canadian 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 Universe has no effect on the direction of Global X i.e., Global X and IShares Canadian go up and down completely randomly.
Pair Corralation between Global X and IShares Canadian
Assuming the 90 days trading horizon Global X is expected to generate 1.2 times less return on investment than IShares Canadian. But when comparing it to its historical volatility, Global X Canadian is 1.02 times less risky than IShares Canadian. It trades about 0.06 of its potential returns per unit of risk. iShares Canadian Universe is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,594 in iShares Canadian Universe on August 31, 2024 and sell it today you would earn a total of 274.00 from holding iShares Canadian Universe or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Global X Canadian vs. iShares Canadian Universe
Performance |
| Timeline |
| Global X Canadian |
| iShares Canadian Universe |
Global X and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares Canadian
The main advantage of trading using opposite Global X and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. Global X Intl | Global X vs. Global X SP | Global X vs. BMO Discount Bond | Global X vs. Global X 7 10 |
| IShares Canadian vs. iShares Canadian Short | IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |