Correlation Between IShares Canadian and CI ONE
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and CI ONE 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 Canadian and CI ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian Government and CI ONE North, you can compare the effects of market volatilities on IShares Canadian and CI ONE 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 Canadian with a short position of CI ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and CI ONE.
Diversification Opportunities for IShares Canadian and CI ONE
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and ONEB is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Government and CI ONE North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI ONE North and IShares Canadian 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 Canadian Government are associated (or correlated) with CI ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI ONE North has no effect on the direction of IShares Canadian i.e., IShares Canadian and CI ONE go up and down completely randomly.
Pair Corralation between IShares Canadian and CI ONE
Assuming the 90 days trading horizon iShares Canadian Government is expected to generate 1.84 times more return on investment than CI ONE. However, IShares Canadian is 1.84 times more volatile than CI ONE North. It trades about 0.08 of its potential returns per unit of risk. CI ONE North is currently generating about 0.13 per unit of risk. If you would invest 1,949 in iShares Canadian Government on September 12, 2024 and sell it today you would earn a total of 17.00 from holding iShares Canadian Government or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Canadian Government vs. CI ONE North
Performance |
| Timeline |
| iShares Canadian Gov |
| CI ONE North |
IShares Canadian and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and CI ONE
The main advantage of trading using opposite IShares Canadian and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, CI ONE 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 ONE will offset losses from the drop in CI ONE's long position.| IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real | IShares Canadian vs. iShares Canadian Value |
| CI ONE vs. CI ONE Global | CI ONE vs. CI Yield Enhanced | CI ONE vs. CI MidCap Dividend | CI ONE vs. CI Canadian Short Term |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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