Correlation Between IShares Canadian and Alaska Energy
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Alaska 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 Canadian and Alaska Energy 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 Alaska Energy Metals, you can compare the effects of market volatilities on IShares Canadian and Alaska 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 Canadian with a short position of Alaska Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Alaska Energy.
Diversification Opportunities for IShares Canadian and Alaska Energy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Alaska is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Alaska Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Energy Metals 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 Alaska Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Energy Metals has no effect on the direction of IShares Canadian i.e., IShares Canadian and Alaska Energy go up and down completely randomly.
Pair Corralation between IShares Canadian and Alaska Energy
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.08 times more return on investment than Alaska Energy. However, iShares Canadian HYBrid is 12.44 times less risky than Alaska Energy. It trades about 0.14 of its potential returns per unit of risk. Alaska Energy Metals is currently generating about -0.21 per unit of risk. If you would invest 1,973 in iShares Canadian HYBrid on September 12, 2024 and sell it today you would earn a total of 21.00 from holding iShares Canadian HYBrid or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Alaska Energy Metals
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Alaska Energy Metals |
IShares Canadian and Alaska Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Alaska Energy
The main advantage of trading using opposite IShares Canadian and Alaska Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Alaska 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 Alaska Energy will offset losses from the drop in Alaska Energy'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 |
| Alaska Energy vs. Datable Technology Corp | Alaska Energy vs. NeXGold Mining Corp | Alaska Energy vs. Renoworks Software | Alaska Energy vs. HPQ Silicon Resources |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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