Correlation Between IShares SPTSX and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and IShares Core 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 IShares Core 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 iShares Core Canadian, you can compare the effects of market volatilities on IShares SPTSX and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and IShares Core.
Diversification Opportunities for IShares SPTSX and IShares Core
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and iShares Core Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Canadian 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Canadian has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and IShares Core go up and down completely randomly.
Pair Corralation between IShares SPTSX and IShares Core
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to under-perform the IShares Core. In addition to that, IShares SPTSX is 5.55 times more volatile than iShares Core Canadian. It trades about -0.02 of its total potential returns per unit of risk. iShares Core Canadian is currently generating about 0.16 per unit of volatility. If you would invest 1,899 in iShares Core Canadian on August 29, 2024 and sell it today you would earn a total of 110.00 from holding iShares Core Canadian or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. iShares Core Canadian
Performance |
| Timeline |
| iShares SPTSX Capped |
| iShares Core Canadian |
IShares SPTSX and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and IShares Core
The main advantage of trading using opposite IShares SPTSX and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core'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 |
| IShares Core vs. BMO Long Corporate | IShares Core vs. BMO Short Corporate | IShares Core vs. BMO High Yield | IShares Core vs. BMO Short Provincial |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |