Correlation Between IShares Canadian and Global X
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Global X 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 Global X 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 Global X Seasonal, you can compare the effects of market volatilities on IShares Canadian and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Global X.
Diversification Opportunities for IShares Canadian and Global X
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Global X Seasonal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Seasonal 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Seasonal has no effect on the direction of IShares Canadian i.e., IShares Canadian and Global X go up and down completely randomly.
Pair Corralation between IShares Canadian and Global X
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.65 times less return on investment than Global X. But when comparing it to its historical volatility, iShares Canadian HYBrid is 1.34 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Seasonal is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,502 in Global X Seasonal on September 2, 2024 and sell it today you would earn a total of 711.00 from holding Global X Seasonal or generate 28.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.98% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Global X Seasonal
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Global X Seasonal |
IShares Canadian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Global X
The main advantage of trading using opposite IShares Canadian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Forstrong Global Income | Global X vs. iShares Canadian HYBrid | Global X vs. Brompton European Dividend | Global X vs. Solar Alliance 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |