Correlation Between IShares Core and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and Fidelity 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 Core and Fidelity Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Fidelity Canadian Value, you can compare the effects of market volatilities on IShares Core and Fidelity 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 Core with a short position of Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Canadian.
Diversification Opportunities for IShares Core and Fidelity Canadian
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Fidelity Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Value 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 MSCI are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Value has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Canadian go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity Canadian
Assuming the 90 days trading horizon IShares Core is expected to generate 1.01 times less return on investment than Fidelity Canadian. But when comparing it to its historical volatility, iShares Core MSCI is 1.16 times less risky than Fidelity Canadian. It trades about 0.07 of its potential returns per unit of risk. Fidelity Canadian Value is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,237 in Fidelity Canadian Value on August 26, 2024 and sell it today you would earn a total of 305.00 from holding Fidelity Canadian Value or generate 24.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Fidelity Canadian Value
Performance |
| Timeline |
| iShares Core MSCI |
| Fidelity Canadian Value |
IShares Core and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity Canadian
The main advantage of trading using opposite IShares Core and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Fidelity 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 Fidelity Canadian will offset losses from the drop in Fidelity Canadian's long position.| IShares Core vs. Vanguard FTSE Developed | IShares Core vs. iShares MSCI EAFE | IShares Core vs. BMO MSCI EAFE | IShares Core vs. BMO Low Volatility |
| Fidelity Canadian vs. iShares SPTSX 60 | Fidelity Canadian vs. iShares Core SP | Fidelity Canadian vs. iShares SPTSX Composite | Fidelity Canadian vs. iShares Core MSCI |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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