Correlation Between IShares Canadian and Harvest Energy
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Harvest Energy 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 Energy 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 Energy Leaders, you can compare the effects of market volatilities on IShares Canadian and Harvest Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Harvest Energy.
Diversification Opportunities for IShares Canadian and Harvest Energy
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Harvest is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and Harvest Energy Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Energy 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Energy Leaders has no effect on the direction of IShares Canadian i.e., IShares Canadian and Harvest Energy go up and down completely randomly.
Pair Corralation between IShares Canadian and Harvest Energy
Assuming the 90 days trading horizon IShares Canadian is expected to generate 3.49 times less return on investment than Harvest Energy. But when comparing it to its historical volatility, iShares Canadian Universe is 1.33 times less risky than Harvest Energy. It trades about 0.06 of its potential returns per unit of risk. Harvest Energy Leaders is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Harvest Energy Leaders on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Harvest Energy Leaders or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
iShares Canadian Universe vs. Harvest Energy Leaders
Performance |
| Timeline |
| iShares Canadian Universe |
| Harvest Energy Leaders |
IShares Canadian and Harvest Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Harvest Energy
The main advantage of trading using opposite IShares Canadian and Harvest Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Harvest Energy 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 Energy will offset losses from the drop in Harvest Energy'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 Short |
| Harvest Energy vs. Global Atomic Corp | Harvest Energy vs. enCore Energy Corp | Harvest Energy vs. Fission Uranium Corp | Harvest Energy vs. NexGen Energy |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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