Correlation Between IShares Canadian and CI Marret
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and CI Marret 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 Marret 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 Marret Alternative, you can compare the effects of market volatilities on IShares Canadian and CI Marret 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 Marret. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and CI Marret.
Diversification Opportunities for IShares Canadian and CI Marret
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and CMAR is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and CI Marret Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Marret Alternative 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 Marret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Marret Alternative has no effect on the direction of IShares Canadian i.e., IShares Canadian and CI Marret go up and down completely randomly.
Pair Corralation between IShares Canadian and CI Marret
Assuming the 90 days trading horizon iShares Canadian Universe is expected to generate 1.61 times more return on investment than CI Marret. However, IShares Canadian is 1.61 times more volatile than CI Marret Alternative. It trades about -0.08 of its potential returns per unit of risk. CI Marret Alternative is currently generating about -0.14 per unit of risk. If you would invest 2,807 in iShares Canadian Universe on August 25, 2024 and sell it today you would lose (17.00) from holding iShares Canadian Universe or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Canadian Universe vs. CI Marret Alternative
Performance |
| Timeline |
| iShares Canadian Universe |
| CI Marret Alternative |
IShares Canadian and CI Marret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and CI Marret
The main advantage of trading using opposite IShares Canadian and CI Marret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, CI Marret 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 Marret will offset losses from the drop in CI Marret's long position.| IShares Canadian vs. Mackenzie Core Plus | IShares Canadian vs. Mackenzie Unconstrained Bond | IShares Canadian vs. Mackenzie Floating Rate | IShares Canadian vs. Mackenzie Canadian Aggregate |
| CI Marret vs. CI Munro Alternative | CI Marret vs. CI Lawrence Park | CI Marret vs. CI Enhanced Short | CI Marret vs. CI Enhanced Government |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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