Correlation Between Vanguard Canadian and IShares Core
Can any of the company-specific risk be diversified away by investing in both Vanguard Canadian 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 Vanguard Canadian and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Canadian Long Term and iShares Core Canadian, you can compare the effects of market volatilities on Vanguard Canadian 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 Vanguard Canadian with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Canadian and IShares Core.
Diversification Opportunities for Vanguard Canadian and IShares Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Canadian Long Term and iShares Core Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Canadian and Vanguard Canadian 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 Vanguard Canadian Long Term 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 Canadian has no effect on the direction of Vanguard Canadian i.e., Vanguard Canadian and IShares Core go up and down completely randomly.
Pair Corralation between Vanguard Canadian and IShares Core
Assuming the 90 days trading horizon Vanguard Canadian Long Term is expected to generate 0.96 times more return on investment than IShares Core. However, Vanguard Canadian Long Term is 1.04 times less risky than IShares Core. It trades about -0.02 of its potential returns per unit of risk. iShares Core Canadian is currently generating about -0.04 per unit of risk. If you would invest 2,103 in Vanguard Canadian Long Term on August 25, 2024 and sell it today you would lose (6.00) from holding Vanguard Canadian Long Term or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Canadian Long Term vs. iShares Core Canadian
Performance |
| Timeline |
| Vanguard Canadian Long |
| iShares Core Canadian |
Vanguard Canadian and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Canadian and IShares Core
The main advantage of trading using opposite Vanguard Canadian and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Canadian 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.| Vanguard Canadian vs. Vanguard Canadian Government | Vanguard Canadian vs. Vanguard Canadian Corporate | Vanguard Canadian vs. Vanguard Canadian Short | Vanguard Canadian vs. Vanguard Canadian Short Term |
| IShares Core vs. iShares Canadian Government | IShares Core vs. iShares Core Canadian | IShares Core vs. iShares Canadian Short | IShares Core vs. iShares Canadian Real |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |