Correlation Between Picton Mahoney and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Picton Mahoney 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 Picton Mahoney and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picton Mahoney Fortified and iShares SPTSX 60, you can compare the effects of market volatilities on Picton Mahoney 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 Picton Mahoney with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and IShares SPTSX.
Diversification Opportunities for Picton Mahoney and IShares SPTSX
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Picton and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and iShares SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX 60 and Picton Mahoney 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 Picton Mahoney Fortified 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 60 has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and IShares SPTSX go up and down completely randomly.
Pair Corralation between Picton Mahoney and IShares SPTSX
Assuming the 90 days trading horizon Picton Mahoney is expected to generate 1.54 times less return on investment than IShares SPTSX. But when comparing it to its historical volatility, Picton Mahoney Fortified is 1.65 times less risky than IShares SPTSX. It trades about 0.16 of its potential returns per unit of risk. iShares SPTSX 60 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,080 in iShares SPTSX 60 on September 14, 2024 and sell it today you would earn a total of 764.00 from holding iShares SPTSX 60 or generate 24.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Picton Mahoney Fortified vs. iShares SPTSX 60
Performance |
| Timeline |
| Picton Mahoney Fortified |
| iShares SPTSX 60 |
Picton Mahoney and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picton Mahoney and IShares SPTSX
The main advantage of trading using opposite Picton Mahoney and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picton Mahoney 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.| Picton Mahoney vs. NBI Liquid Alternatives | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified |
| IShares SPTSX vs. iShares Core SP | IShares SPTSX vs. iShares Core SPTSX | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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