Correlation Between IShares Canadian and CI Gold
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and CI Gold 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 Gold 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 Gold Giants, you can compare the effects of market volatilities on IShares Canadian and CI Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and CI Gold.
Diversification Opportunities for IShares Canadian and CI Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and CGXF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and CI Gold Giants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Giants 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Giants has no effect on the direction of IShares Canadian i.e., IShares Canadian and CI Gold go up and down completely randomly.
Pair Corralation between IShares Canadian and CI Gold
Assuming the 90 days trading horizon IShares Canadian is expected to generate 4.79 times less return on investment than CI Gold. But when comparing it to its historical volatility, iShares Canadian Universe is 4.66 times less risky than CI Gold. It trades about 0.1 of its potential returns per unit of risk. CI Gold Giants is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 950.00 in CI Gold Giants on September 13, 2024 and sell it today you would earn a total of 197.00 from holding CI Gold Giants or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian Universe vs. CI Gold Giants
Performance |
| Timeline |
| iShares Canadian Universe |
| CI Gold Giants |
IShares Canadian and CI Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and CI Gold
The main advantage of trading using opposite IShares Canadian and CI Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, CI Gold 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 Gold will offset losses from the drop in CI Gold'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 Gold vs. First Asset Energy | CI Gold vs. First Asset Tech | CI Gold vs. Harvest Equal Weight | CI Gold vs. CI Canada Lifeco |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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