Correlation Between BetaPro Canadian and BetaPro SPTSX
Can any of the company-specific risk be diversified away by investing in both BetaPro Canadian and BetaPro 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 BetaPro Canadian and BetaPro SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Canadian Gold and BetaPro SPTSX Capped, you can compare the effects of market volatilities on BetaPro Canadian and BetaPro 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 BetaPro Canadian with a short position of BetaPro SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Canadian and BetaPro SPTSX.
Diversification Opportunities for BetaPro Canadian and BetaPro SPTSX
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BetaPro and BetaPro is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and BetaPro SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro SPTSX Capped and BetaPro 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 BetaPro Canadian Gold are associated (or correlated) with BetaPro SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro SPTSX Capped has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and BetaPro SPTSX go up and down completely randomly.
Pair Corralation between BetaPro Canadian and BetaPro SPTSX
Assuming the 90 days trading horizon BetaPro Canadian is expected to generate 6.21 times less return on investment than BetaPro SPTSX. But when comparing it to its historical volatility, BetaPro Canadian Gold is 8.06 times less risky than BetaPro SPTSX. It trades about 0.08 of its potential returns per unit of risk. BetaPro SPTSX Capped is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 480.00 in BetaPro SPTSX Capped on September 1, 2024 and sell it today you would earn a total of 1,839 from holding BetaPro SPTSX Capped or generate 383.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Canadian Gold vs. BetaPro SPTSX Capped
Performance |
| Timeline |
| BetaPro Canadian Gold |
| BetaPro SPTSX Capped |
BetaPro Canadian and BetaPro SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Canadian and BetaPro SPTSX
The main advantage of trading using opposite BetaPro Canadian and BetaPro SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Canadian position performs unexpectedly, BetaPro 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 BetaPro SPTSX will offset losses from the drop in BetaPro SPTSX's long position.| BetaPro Canadian vs. BetaPro SPTSX Capped | BetaPro Canadian vs. Forstrong Global Income | BetaPro Canadian vs. BMO Aggregate Bond | BetaPro Canadian vs. iShares Canadian HYBrid |
| BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SPTSX Capped | BetaPro SPTSX vs. BetaPro SPTSX 60 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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