Correlation Between IShares Canadian and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on IShares Canadian and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Canlan Ice.
Diversification Opportunities for IShares Canadian and Canlan Ice
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Canlan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of IShares Canadian i.e., IShares Canadian and Canlan Ice go up and down completely randomly.
Pair Corralation between IShares Canadian and Canlan Ice
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 2.13 times more return on investment than Canlan Ice. However, IShares Canadian is 2.13 times more volatile than Canlan Ice Sports. It trades about 0.18 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about -0.07 per unit of risk. If you would invest 1,967 in iShares Canadian HYBrid on September 13, 2024 and sell it today you would earn a total of 27.00 from holding iShares Canadian HYBrid or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Canlan Ice Sports
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Canlan Ice Sports |
IShares Canadian and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Canlan Ice
The main advantage of trading using opposite IShares Canadian and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice'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 |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Foraco International SA | Canlan Ice 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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