Correlation Between Blockchain Technologies and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Blockchain Technologies and IShares SPTSX 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 Blockchain Technologies and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Technologies ETF and iShares SPTSX Capped, you can compare the effects of market volatilities on Blockchain Technologies and IShares SPTSX 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 Blockchain Technologies with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Technologies and IShares SPTSX.
Diversification Opportunities for Blockchain Technologies and IShares SPTSX
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blockchain and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Technologies ETF and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and Blockchain Technologies 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 Blockchain Technologies ETF are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of Blockchain Technologies i.e., Blockchain Technologies and IShares SPTSX go up and down completely randomly.
Pair Corralation between Blockchain Technologies and IShares SPTSX
Assuming the 90 days trading horizon Blockchain Technologies ETF is expected to generate 3.92 times more return on investment than IShares SPTSX. However, Blockchain Technologies is 3.92 times more volatile than iShares SPTSX Capped. It trades about 0.18 of its potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.15 per unit of risk. If you would invest 1,503 in Blockchain Technologies ETF on August 28, 2024 and sell it today you would earn a total of 553.00 from holding Blockchain Technologies ETF or generate 36.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blockchain Technologies ETF vs. iShares SPTSX Capped
Performance |
| Timeline |
| Blockchain Technologies |
| iShares SPTSX Capped |
Blockchain Technologies and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Technologies and IShares SPTSX
The main advantage of trading using opposite Blockchain Technologies and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Technologies position performs unexpectedly, IShares SPTSX 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 SPTSX will offset losses from the drop in IShares SPTSX's long position.| Blockchain Technologies vs. BMO Equal Weight | Blockchain Technologies vs. BMO SPTSX Equal | Blockchain Technologies vs. BMO Equal Weight |
| IShares SPTSX vs. BMO Equal Weight | IShares SPTSX vs. BMO SPTSX Equal | IShares SPTSX vs. BMO Equal Weight |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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