Correlation Between IShares Canadian and Advantage Oil
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Advantage Oil 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 Advantage Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and Advantage Oil Gas, you can compare the effects of market volatilities on IShares Canadian and Advantage Oil 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 Advantage Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Advantage Oil.
Diversification Opportunities for IShares Canadian and Advantage Oil
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Advantage is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Advantage Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Oil Gas 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 HYBrid are associated (or correlated) with Advantage Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Oil Gas has no effect on the direction of IShares Canadian i.e., IShares Canadian and Advantage Oil go up and down completely randomly.
Pair Corralation between IShares Canadian and Advantage Oil
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.25 times less return on investment than Advantage Oil. But when comparing it to its historical volatility, iShares Canadian HYBrid is 5.32 times less risky than Advantage Oil. It trades about 0.12 of its potential returns per unit of risk. Advantage Oil Gas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Advantage Oil Gas on November 19, 2024 and sell it today you would earn a total of 169.00 from holding Advantage Oil Gas or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Advantage Oil Gas
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Advantage Oil Gas |
IShares Canadian and Advantage Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Advantage Oil
The main advantage of trading using opposite IShares Canadian and Advantage Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Advantage Oil 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 Advantage Oil will offset losses from the drop in Advantage Oil's long position.| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
| Advantage Oil vs. Birchcliff Energy | Advantage Oil vs. NuVista Energy | Advantage Oil vs. Kelt Exploration | Advantage Oil vs. Peyto ExplorationDevelopment Corp |
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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