Correlation Between IShares Canadian and Fidelity Advantage
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Fidelity Advantage 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 Fidelity Advantage 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 Fidelity Advantage Bitcoin, you can compare the effects of market volatilities on IShares Canadian and Fidelity Advantage 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 Fidelity Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Fidelity Advantage.
Diversification Opportunities for IShares Canadian and Fidelity Advantage
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Fidelity is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and Fidelity Advantage Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage 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 Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage has no effect on the direction of IShares Canadian i.e., IShares Canadian and Fidelity Advantage go up and down completely randomly.
Pair Corralation between IShares Canadian and Fidelity Advantage
Assuming the 90 days trading horizon IShares Canadian is expected to generate 43.24 times less return on investment than Fidelity Advantage. But when comparing it to its historical volatility, iShares Canadian Universe is 10.63 times less risky than Fidelity Advantage. It trades about 0.08 of its potential returns per unit of risk. Fidelity Advantage Bitcoin is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,205 in Fidelity Advantage Bitcoin on August 29, 2024 and sell it today you would earn a total of 1,033 from holding Fidelity Advantage Bitcoin or generate 32.23% 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. Fidelity Advantage Bitcoin
Performance |
| Timeline |
| iShares Canadian Universe |
| Fidelity Advantage |
IShares Canadian and Fidelity Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Fidelity Advantage
The main advantage of trading using opposite IShares Canadian and Fidelity Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Fidelity Advantage 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 Fidelity Advantage will offset losses from the drop in Fidelity Advantage's long position.| IShares Canadian vs. iShares Canadian Short | IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real |
| Fidelity Advantage vs. 3iQ Bitcoin ETF | Fidelity Advantage vs. Purpose Bitcoin CAD | Fidelity Advantage vs. 3iQ CoinShares Ether | Fidelity Advantage vs. BetaPro Inverse Bitcoin |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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