Correlation Between CI MidCap and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both CI MidCap 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 CI MidCap and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI MidCap Dividend and iShares SPTSX Small, you can compare the effects of market volatilities on CI MidCap 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 CI MidCap with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI MidCap and IShares SPTSX.
Diversification Opportunities for CI MidCap and IShares SPTSX
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UMI and IShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CI MidCap Dividend and iShares SPTSX Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Small and CI MidCap 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 MidCap Dividend 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 Small has no effect on the direction of CI MidCap i.e., CI MidCap and IShares SPTSX go up and down completely randomly.
Pair Corralation between CI MidCap and IShares SPTSX
Assuming the 90 days trading horizon CI MidCap Dividend is expected to under-perform the IShares SPTSX. But the etf apears to be less risky and, when comparing its historical volatility, CI MidCap Dividend is 1.14 times less risky than IShares SPTSX. The etf trades about -0.16 of its potential returns per unit of risk. The iShares SPTSX Small is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,093 in iShares SPTSX Small on November 28, 2024 and sell it today you would lose (4.00) from holding iShares SPTSX Small or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CI MidCap Dividend vs. iShares SPTSX Small
Performance |
| Timeline |
| CI MidCap Dividend |
| iShares SPTSX Small |
CI MidCap and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI MidCap and IShares SPTSX
The main advantage of trading using opposite CI MidCap and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI MidCap 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.The idea behind CI MidCap Dividend and iShares SPTSX Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares SPTSX vs. iShares Convertible Bond | IShares SPTSX vs. iShares SP Mid Cap | IShares SPTSX vs. iShares Edge MSCI | IShares SPTSX vs. iShares Flexible Monthly |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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