Correlation Between IShares Core and CI Preferred
Can any of the company-specific risk be diversified away by investing in both IShares Core and CI Preferred 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 Core and CI Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Canadian and CI Preferred Share, you can compare the effects of market volatilities on IShares Core and CI Preferred 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 Core with a short position of CI Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and CI Preferred.
Diversification Opportunities for IShares Core and CI Preferred
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and FPR is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Canadian and CI Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Preferred Share and IShares Core 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 Core Canadian are associated (or correlated) with CI Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Preferred Share has no effect on the direction of IShares Core i.e., IShares Core and CI Preferred go up and down completely randomly.
Pair Corralation between IShares Core and CI Preferred
Assuming the 90 days trading horizon IShares Core is expected to generate 2.04 times less return on investment than CI Preferred. In addition to that, IShares Core is 1.31 times more volatile than CI Preferred Share. It trades about 0.16 of its total potential returns per unit of risk. CI Preferred Share is currently generating about 0.42 per unit of volatility. If you would invest 2,230 in CI Preferred Share on September 15, 2024 and sell it today you would earn a total of 60.00 from holding CI Preferred Share or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Canadian vs. CI Preferred Share
Performance |
| Timeline |
| iShares Core Canadian |
| CI Preferred Share |
IShares Core and CI Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and CI Preferred
The main advantage of trading using opposite IShares Core and CI Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, CI Preferred 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 Preferred will offset losses from the drop in CI Preferred's long position.| IShares Core vs. BMO Mid Corporate | IShares Core vs. Global X Active | IShares Core vs. iShares 1 10Yr Laddered | IShares Core vs. RBC Target 2026 |
| CI Preferred vs. iShares 1 5 Year | CI Preferred vs. iShares 1 5 Year | CI Preferred vs. iShares Core Canadian | CI Preferred vs. iShares Global Monthly |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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