Correlation Between IShares Canadian and FG Acquisition
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and FG Acquisition 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 FG Acquisition 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 FG Acquisition Corp, you can compare the effects of market volatilities on IShares Canadian and FG Acquisition 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 FG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and FG Acquisition.
Diversification Opportunities for IShares Canadian and FG Acquisition
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and FGAA-U is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and FG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Acquisition 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 FG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Acquisition Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and FG Acquisition go up and down completely randomly.
Pair Corralation between IShares Canadian and FG Acquisition
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 1.27 times more return on investment than FG Acquisition. However, IShares Canadian is 1.27 times more volatile than FG Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. FG Acquisition Corp is currently generating about 0.07 per unit of risk. If you would invest 1,590 in iShares Canadian HYBrid on September 12, 2024 and sell it today you would earn a total of 408.00 from holding iShares Canadian HYBrid or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. FG Acquisition Corp
Performance |
| Timeline |
| iShares Canadian HYBrid |
| FG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
IShares Canadian and FG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and FG Acquisition
The main advantage of trading using opposite IShares Canadian and FG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, FG Acquisition 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 FG Acquisition will offset losses from the drop in FG Acquisition'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 |
| FG Acquisition vs. Westshore Terminals Investment | FG Acquisition vs. Mako Mining Corp | FG Acquisition vs. Dream Industrial Real | FG Acquisition vs. Nicola Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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