Correlation Between IShares Canadian and CI Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and CI Canadian 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 IShares Canadian and CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian Universe and CI Canadian Short Term, you can compare the effects of market volatilities on IShares Canadian and CI Canadian 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 IShares Canadian with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and CI Canadian.
Diversification Opportunities for IShares Canadian and CI Canadian
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and CAGS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and CI Canadian Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Short and IShares 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 iShares Canadian Universe are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Short has no effect on the direction of IShares Canadian i.e., IShares Canadian and CI Canadian go up and down completely randomly.
Pair Corralation between IShares Canadian and CI Canadian
Assuming the 90 days trading horizon iShares Canadian Universe is expected to generate 2.06 times more return on investment than CI Canadian. However, IShares Canadian is 2.06 times more volatile than CI Canadian Short Term. It trades about 0.09 of its potential returns per unit of risk. CI Canadian Short Term is currently generating about 0.17 per unit of risk. If you would invest 2,748 in iShares Canadian Universe on September 14, 2024 and sell it today you would earn a total of 109.00 from holding iShares Canadian Universe or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian Universe vs. CI Canadian Short Term
Performance |
| Timeline |
| iShares Canadian Universe |
| CI Canadian Short |
IShares Canadian and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and CI Canadian
The main advantage of trading using opposite IShares Canadian and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, CI Canadian 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real | IShares Canadian vs. iShares Canadian Value |
| CI Canadian vs. iShares Canadian Universe | CI Canadian vs. iShares Canadian Real | CI Canadian vs. iShares Core Canadian | CI Canadian vs. iShares Core Canadian |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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