Correlation Between IShares Canadian and BetaPro SP
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and BetaPro SP 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 BetaPro SP 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 BetaPro SP 500, you can compare the effects of market volatilities on IShares Canadian and BetaPro SP 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 BetaPro SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and BetaPro SP.
Diversification Opportunities for IShares Canadian and BetaPro SP
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and BetaPro is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and BetaPro SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro SP 500 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 BetaPro SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro SP 500 has no effect on the direction of IShares Canadian i.e., IShares Canadian and BetaPro SP go up and down completely randomly.
Pair Corralation between IShares Canadian and BetaPro SP
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.38 times more return on investment than BetaPro SP. However, iShares Canadian HYBrid is 2.61 times less risky than BetaPro SP. It trades about 0.19 of its potential returns per unit of risk. BetaPro SP 500 is currently generating about -0.17 per unit of risk. If you would invest 1,927 in iShares Canadian HYBrid on September 2, 2024 and sell it today you would earn a total of 64.00 from holding iShares Canadian HYBrid or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. BetaPro SP 500
Performance |
| Timeline |
| iShares Canadian HYBrid |
| BetaPro SP 500 |
IShares Canadian and BetaPro SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and BetaPro SP
The main advantage of trading using opposite IShares Canadian and BetaPro SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, BetaPro SP 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 BetaPro SP will offset losses from the drop in BetaPro SP'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 |
| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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