Correlation Between IShares SPTSX and Next Hydrogen
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Next Hydrogen 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 SPTSX and Next Hydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Next Hydrogen Solutions, you can compare the effects of market volatilities on IShares SPTSX and Next Hydrogen 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 SPTSX with a short position of Next Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Next Hydrogen.
Diversification Opportunities for IShares SPTSX and Next Hydrogen
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Next is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Next Hydrogen Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Hydrogen Solutions and IShares SPTSX 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 SPTSX Capped are associated (or correlated) with Next Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Hydrogen Solutions has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Next Hydrogen go up and down completely randomly.
Pair Corralation between IShares SPTSX and Next Hydrogen
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 0.22 times more return on investment than Next Hydrogen. However, iShares SPTSX Capped is 4.49 times less risky than Next Hydrogen. It trades about 0.06 of its potential returns per unit of risk. Next Hydrogen Solutions is currently generating about -0.01 per unit of risk. If you would invest 1,398 in iShares SPTSX Capped on August 31, 2024 and sell it today you would earn a total of 401.00 from holding iShares SPTSX Capped or generate 28.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Next Hydrogen Solutions
Performance |
| Timeline |
| iShares SPTSX Capped |
| Next Hydrogen Solutions |
IShares SPTSX and Next Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Next Hydrogen
The main advantage of trading using opposite IShares SPTSX and Next Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Next Hydrogen 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 Next Hydrogen will offset losses from the drop in Next Hydrogen's long position.| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global | IShares SPTSX vs. iShares SPTSX 60 | IShares SPTSX vs. iShares SPTSX Capped |
| Next Hydrogen vs. NeXGold Mining Corp | Next Hydrogen vs. Verizon Communications CDR | Next Hydrogen vs. Highwood Asset Management | Next Hydrogen vs. Western Copper and |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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