Correlation Between IShares Canadian and Baytex Energy
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Baytex 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 Baytex 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 Baytex Energy Corp, you can compare the effects of market volatilities on IShares Canadian and Baytex 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 Baytex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Baytex Energy.
Diversification Opportunities for IShares Canadian and Baytex Energy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Baytex is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Baytex Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baytex Energy Corp 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 Baytex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baytex Energy Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and Baytex Energy go up and down completely randomly.
Pair Corralation between IShares Canadian and Baytex Energy
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.15 times more return on investment than Baytex Energy. However, iShares Canadian HYBrid is 6.63 times less risky than Baytex Energy. It trades about 0.09 of its potential returns per unit of risk. Baytex Energy Corp is currently generating about -0.01 per unit of risk. If you would invest 1,699 in iShares Canadian HYBrid on August 31, 2024 and sell it today you would earn a total of 292.00 from holding iShares Canadian HYBrid or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Baytex Energy Corp
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Baytex Energy Corp |
IShares Canadian and Baytex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Baytex Energy
The main advantage of trading using opposite IShares Canadian and Baytex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Baytex 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 Baytex Energy will offset losses from the drop in Baytex 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 |
| Baytex Energy vs. MEG Energy Corp | Baytex Energy vs. Whitecap Resources | Baytex Energy vs. Athabasca Oil Corp | Baytex Energy vs. Cenovus Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |