Correlation Between First Asset and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both First Asset 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 First Asset and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Energy and iShares SPTSX Capped, you can compare the effects of market volatilities on First Asset 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 First Asset with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and IShares SPTSX.
Diversification Opportunities for First Asset and IShares SPTSX
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and IShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Energy 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 First Asset 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 First Asset Energy 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 First Asset i.e., First Asset and IShares SPTSX go up and down completely randomly.
Pair Corralation between First Asset and IShares SPTSX
Assuming the 90 days trading horizon First Asset is expected to generate 8.36 times less return on investment than IShares SPTSX. In addition to that, First Asset is 1.67 times more volatile than iShares SPTSX Capped. It trades about 0.04 of its total potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.61 per unit of volatility. If you would invest 5,731 in iShares SPTSX Capped on September 4, 2024 and sell it today you would earn a total of 377.00 from holding iShares SPTSX Capped or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Energy vs. iShares SPTSX Capped
Performance |
| Timeline |
| First Asset Energy |
| iShares SPTSX Capped |
First Asset and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and IShares SPTSX
The main advantage of trading using opposite First Asset and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset 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.| First Asset vs. CI Gold Giants | First Asset vs. First Asset Tech | First Asset vs. CI Canada Lifeco | First Asset vs. Harvest Healthcare Leaders |
| IShares SPTSX vs. First Asset Energy | IShares SPTSX vs. CI Gold Giants | IShares SPTSX vs. Harvest Equal Weight | IShares SPTSX vs. First Asset Tech |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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