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 Loomis and IA Clarington Core, 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
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IGAF and ICPB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Loomis and IA Clarington Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Core 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 Loomis 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 Core 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 Loomis is expected to generate 1.98 times more return on investment than IA Clarington. However, IA Clarington is 1.98 times more volatile than IA Clarington Core. It trades about 0.14 of its potential returns per unit of risk. IA Clarington Core is currently generating about 0.09 per unit of risk. If you would invest 1,264 in IA Clarington Loomis on August 29, 2024 and sell it today you would earn a total of 291.00 from holding IA Clarington Loomis or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IA Clarington Loomis vs. IA Clarington Core
Performance |
| Timeline |
| IA Clarington Loomis |
| IA Clarington Core |
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 Floating | IA Clarington vs. IA Clarington Strategic | IA Clarington vs. Purpose Global Bond |
| IA Clarington vs. Mackenzie Canadian Aggregate | IA Clarington vs. Mackenzie Core Plus | IA Clarington vs. Mackenzie Investment Grade | IA Clarington vs. Mackenzie Core Plus |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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