Correlation Between IShares Canadian and Great West
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on IShares Canadian and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Great West.
Diversification Opportunities for IShares Canadian and Great West
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Great is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of IShares Canadian i.e., IShares Canadian and Great West go up and down completely randomly.
Pair Corralation between IShares Canadian and Great West
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.54 times more return on investment than Great West. However, iShares Canadian HYBrid is 1.86 times less risky than Great West. It trades about 0.01 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.29 per unit of risk. If you would invest 1,953 in iShares Canadian HYBrid on August 25, 2024 and sell it today you would earn a total of 1.00 from holding iShares Canadian HYBrid or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Great West Lifeco
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Great West Lifeco |
IShares Canadian and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Great West
The main advantage of trading using opposite IShares Canadian and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Forstrong Global Income | Great West vs. BMO Aggregate Bond | Great West vs. Terreno Resources Corp | Great West vs. iShares Canadian HYBrid |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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