Correlation Between IShares Canadian and Invesco Fundamental
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Invesco Fundamental 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 Invesco Fundamental 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 Invesco Fundamental High, you can compare the effects of market volatilities on IShares Canadian and Invesco Fundamental 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 Invesco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Invesco Fundamental.
Diversification Opportunities for IShares Canadian and Invesco Fundamental
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Invesco is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and Invesco Fundamental High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Fundamental High 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 Invesco Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Fundamental High has no effect on the direction of IShares Canadian i.e., IShares Canadian and Invesco Fundamental go up and down completely randomly.
Pair Corralation between IShares Canadian and Invesco Fundamental
Assuming the 90 days trading horizon iShares Canadian Universe is expected to generate 0.53 times more return on investment than Invesco Fundamental. However, iShares Canadian Universe is 1.88 times less risky than Invesco Fundamental. It trades about 0.17 of its potential returns per unit of risk. Invesco Fundamental High is currently generating about 0.02 per unit of risk. If you would invest 2,830 in iShares Canadian Universe on November 28, 2024 and sell it today you would earn a total of 40.00 from holding iShares Canadian Universe or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Canadian Universe vs. Invesco Fundamental High
Performance |
| Timeline |
| iShares Canadian Universe |
| Invesco Fundamental High |
IShares Canadian and Invesco Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Invesco Fundamental
The main advantage of trading using opposite IShares Canadian and Invesco Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Invesco Fundamental 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 Invesco Fundamental will offset losses from the drop in Invesco Fundamental'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 |
| Invesco Fundamental vs. Invesco SP International | Invesco Fundamental vs. Invesco FTSE RAFI | Invesco Fundamental vs. Invesco ESG NASDAQ | Invesco Fundamental vs. Invesco SP International |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |