Correlation Between CI WisdomTree and IShares Core
Can any of the company-specific risk be diversified away by investing in both CI WisdomTree and IShares Core 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 CI WisdomTree and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI WisdomTree Japan and iShares Core SP, you can compare the effects of market volatilities on CI WisdomTree and IShares Core 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 CI WisdomTree with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI WisdomTree and IShares Core.
Diversification Opportunities for CI WisdomTree and IShares Core
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JAPN and IShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CI WisdomTree Japan and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and CI WisdomTree 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 CI WisdomTree Japan are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of CI WisdomTree i.e., CI WisdomTree and IShares Core go up and down completely randomly.
Pair Corralation between CI WisdomTree and IShares Core
Assuming the 90 days trading horizon CI WisdomTree is expected to generate 8.26 times less return on investment than IShares Core. In addition to that, CI WisdomTree is 1.96 times more volatile than iShares Core SP. It trades about 0.01 of its total potential returns per unit of risk. iShares Core SP is currently generating about 0.17 per unit of volatility. If you would invest 5,265 in iShares Core SP on August 28, 2024 and sell it today you would earn a total of 970.00 from holding iShares Core SP or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
CI WisdomTree Japan vs. iShares Core SP
Performance |
| Timeline |
| CI WisdomTree Japan |
| iShares Core SP |
CI WisdomTree and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI WisdomTree and IShares Core
The main advantage of trading using opposite CI WisdomTree and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI WisdomTree position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| CI WisdomTree vs. NBI High Yield | CI WisdomTree vs. NBI Unconstrained Fixed | CI WisdomTree vs. Mackenzie Developed ex North | CI WisdomTree vs. BMO Short Term Bond |
| IShares Core vs. Vanguard FTSE Canada | IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core MSCI | IShares Core vs. Vanguard Total Market |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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