Correlation Between IShares Canadian and Element Fleet
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Element Fleet 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 Element Fleet 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 Element Fleet Management, you can compare the effects of market volatilities on IShares Canadian and Element Fleet 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 Element Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Element Fleet.
Diversification Opportunities for IShares Canadian and Element Fleet
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Element is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management 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 Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of IShares Canadian i.e., IShares Canadian and Element Fleet go up and down completely randomly.
Pair Corralation between IShares Canadian and Element Fleet
Assuming the 90 days trading horizon IShares Canadian is expected to generate 2.11 times less return on investment than Element Fleet. But when comparing it to its historical volatility, iShares Canadian HYBrid is 4.66 times less risky than Element Fleet. It trades about 0.26 of its potential returns per unit of risk. Element Fleet Management is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,853 in Element Fleet Management on September 2, 2024 and sell it today you would earn a total of 117.00 from holding Element Fleet Management or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Element Fleet Management
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Element Fleet Management |
IShares Canadian and Element Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Element Fleet
The main advantage of trading using opposite IShares Canadian and Element Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Element Fleet 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 Element Fleet will offset losses from the drop in Element Fleet'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 |
| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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