Correlation Between IA Clarington and IA Clarington
Can any of the company-specific risk be diversified away by investing in both IA Clarington and IA Clarington 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 IA Clarington and IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA Clarington Floating and IA Clarington Strategic, you can compare the effects of market volatilities on IA Clarington and IA Clarington 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 IA Clarington with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and IA Clarington.
Diversification Opportunities for IA Clarington and IA Clarington
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IFRF and ISIF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Floating and IA Clarington Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Strategic and IA Clarington 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 IA Clarington Floating are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Strategic has no effect on the direction of IA Clarington i.e., IA Clarington and IA Clarington go up and down completely randomly.
Pair Corralation between IA Clarington and IA Clarington
Assuming the 90 days trading horizon IA Clarington is expected to generate 25.25 times less return on investment than IA Clarington. But when comparing it to its historical volatility, IA Clarington Floating is 1.96 times less risky than IA Clarington. It trades about 0.01 of its potential returns per unit of risk. IA Clarington Strategic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,045 in IA Clarington Strategic on August 29, 2024 and sell it today you would earn a total of 164.00 from holding IA Clarington Strategic or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IA Clarington Floating vs. IA Clarington Strategic
Performance |
| Timeline |
| IA Clarington Floating |
| IA Clarington Strategic |
IA Clarington and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and IA Clarington
The main advantage of trading using opposite IA Clarington and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.| IA Clarington vs. IA Clarington Core | IA Clarington vs. IA Clarington Loomis | IA Clarington vs. IA Clarington Strategic | IA Clarington vs. PIMCO Investment Grade |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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