Correlation Between IShares SPTSX and Total Energy
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Total Energy 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 Total Energy 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 Total Energy Services, you can compare the effects of market volatilities on IShares SPTSX and Total Energy 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Total Energy.
Diversification Opportunities for IShares SPTSX and Total Energy
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Total is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Total Energy go up and down completely randomly.
Pair Corralation between IShares SPTSX and Total Energy
Assuming the 90 days trading horizon IShares SPTSX is expected to generate 1.55 times less return on investment than Total Energy. But when comparing it to its historical volatility, iShares SPTSX Capped is 1.27 times less risky than Total Energy. It trades about 0.04 of its potential returns per unit of risk. Total Energy Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 843.00 in Total Energy Services on August 26, 2024 and sell it today you would earn a total of 337.00 from holding Total Energy Services or generate 39.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Total Energy Services
Performance |
| Timeline |
| iShares SPTSX Capped |
| Total Energy Services |
IShares SPTSX and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Total Energy
The main advantage of trading using opposite IShares SPTSX and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Total Energy 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 Total Energy will offset losses from the drop in Total Energy'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 |
| Total Energy vs. PHX Energy Services | Total Energy vs. Pason Systems | Total Energy vs. CES Energy Solutions | Total Energy vs. Western Energy Services |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |