Correlation Between IShares Canadian and BetaPro NASDAQ
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and BetaPro NASDAQ 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 NASDAQ 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 NASDAQ 100 2x, you can compare the effects of market volatilities on IShares Canadian and BetaPro NASDAQ 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 NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and BetaPro NASDAQ.
Diversification Opportunities for IShares Canadian and BetaPro NASDAQ
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and BetaPro is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and BetaPro NASDAQ 100 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro NASDAQ 100 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 NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro NASDAQ 100 has no effect on the direction of IShares Canadian i.e., IShares Canadian and BetaPro NASDAQ go up and down completely randomly.
Pair Corralation between IShares Canadian and BetaPro NASDAQ
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.18 times more return on investment than BetaPro NASDAQ. However, iShares Canadian HYBrid is 5.48 times less risky than BetaPro NASDAQ. It trades about 0.24 of its potential returns per unit of risk. BetaPro NASDAQ 100 2x is currently generating about -0.22 per unit of risk. If you would invest 1,956 in iShares Canadian HYBrid on September 3, 2024 and sell it today you would earn a total of 35.00 from holding iShares Canadian HYBrid or generate 1.79% 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 NASDAQ 100 2x
Performance |
| Timeline |
| iShares Canadian HYBrid |
| BetaPro NASDAQ 100 |
IShares Canadian and BetaPro NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and BetaPro NASDAQ
The main advantage of trading using opposite IShares Canadian and BetaPro NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, BetaPro NASDAQ 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 NASDAQ will offset losses from the drop in BetaPro NASDAQ'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 NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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