Correlation Between IShares Canadian and Harvest Brand
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Harvest Brand 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 Harvest Brand 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 Harvest Brand Leaders, you can compare the effects of market volatilities on IShares Canadian and Harvest Brand 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 Harvest Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Harvest Brand.
Diversification Opportunities for IShares Canadian and Harvest Brand
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Harvest is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and Harvest Brand Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Brand Leaders 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 Harvest Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Brand Leaders has no effect on the direction of IShares Canadian i.e., IShares Canadian and Harvest Brand go up and down completely randomly.
Pair Corralation between IShares Canadian and Harvest Brand
Assuming the 90 days trading horizon iShares Canadian Universe is expected to under-perform the Harvest Brand. But the etf apears to be less risky and, when comparing its historical volatility, iShares Canadian Universe is 1.64 times less risky than Harvest Brand. The etf trades about -0.02 of its potential returns per unit of risk. The Harvest Brand Leaders is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Harvest Brand Leaders on August 31, 2024 and sell it today you would earn a total of 76.00 from holding Harvest Brand Leaders or generate 6.84% 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. Harvest Brand Leaders
Performance |
| Timeline |
| iShares Canadian Universe |
| Harvest Brand Leaders |
IShares Canadian and Harvest Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Harvest Brand
The main advantage of trading using opposite IShares Canadian and Harvest Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Harvest Brand 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 Harvest Brand will offset losses from the drop in Harvest Brand'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 |
| Harvest Brand vs. Harvest Premium Yield | Harvest Brand vs. Harvest Balanced Income | Harvest Brand vs. Harvest Energy Leaders | Harvest Brand vs. Harvest Eli Lilly |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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