Correlation Between IShares JP and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both IShares JP and IShares Canadian 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 JP and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and iShares Canadian HYBrid, you can compare the effects of market volatilities on IShares JP and IShares Canadian 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 JP with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and IShares Canadian.
Diversification Opportunities for IShares JP and IShares Canadian
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid and IShares JP 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 JP Morgan are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of IShares JP i.e., IShares JP and IShares Canadian go up and down completely randomly.
Pair Corralation between IShares JP and IShares Canadian
Assuming the 90 days trading horizon IShares JP is expected to generate 1.1 times less return on investment than IShares Canadian. In addition to that, IShares JP is 1.64 times more volatile than iShares Canadian HYBrid. It trades about 0.05 of its total potential returns per unit of risk. iShares Canadian HYBrid is currently generating about 0.1 per unit of volatility. If you would invest 1,953 in iShares Canadian HYBrid on August 29, 2024 and sell it today you would earn a total of 11.00 from holding iShares Canadian HYBrid or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares JP Morgan vs. iShares Canadian HYBrid
Performance |
| Timeline |
| iShares JP Morgan |
| iShares Canadian HYBrid |
IShares JP and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and IShares Canadian
The main advantage of trading using opposite IShares JP and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.| IShares JP vs. iShares IG Corporate | IShares JP vs. iShares 1 10Yr Laddered | IShares JP vs. iShares Floating Rate | IShares JP vs. iShares Convertible Bond |
| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |