Correlation Between IShares SPTSX and CI Canadian
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and CI 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 SPTSX and CI Canadian 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 CI Canadian Banks, you can compare the effects of market volatilities on IShares SPTSX and CI 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 SPTSX with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and CI Canadian.
Diversification Opportunities for IShares SPTSX and CI Canadian
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and CIC is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and CI Canadian Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Banks 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 CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Banks has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and CI Canadian go up and down completely randomly.
Pair Corralation between IShares SPTSX and CI Canadian
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 1.01 times more return on investment than CI Canadian. However, IShares SPTSX is 1.01 times more volatile than CI Canadian Banks. It trades about 0.09 of its potential returns per unit of risk. CI Canadian Banks is currently generating about 0.06 per unit of risk. If you would invest 4,505 in iShares SPTSX Capped on September 1, 2024 and sell it today you would earn a total of 1,595 from holding iShares SPTSX Capped or generate 35.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. CI Canadian Banks
Performance |
| Timeline |
| iShares SPTSX Capped |
| CI Canadian Banks |
IShares SPTSX and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and CI Canadian
The main advantage of trading using opposite IShares SPTSX and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, CI 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global | IShares SPTSX vs. iShares SPTSX Capped |
| CI Canadian vs. Celestica | CI Canadian vs. Descartes Systems Group | CI Canadian vs. Hamilton MidSmall Cap Financials | CI Canadian vs. CI Canada Lifeco |
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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