Correlation Between IShares Canadian and In Touch
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and In Touch 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 In Touch 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 In Touch Survey Systems, you can compare the effects of market volatilities on IShares Canadian and In Touch 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 In Touch. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and In Touch.
Diversification Opportunities for IShares Canadian and In Touch
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and INX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and In Touch Survey Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Touch Survey 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 In Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Touch Survey has no effect on the direction of IShares Canadian i.e., IShares Canadian and In Touch go up and down completely randomly.
Pair Corralation between IShares Canadian and In Touch
Assuming the 90 days trading horizon IShares Canadian is expected to generate 55.07 times less return on investment than In Touch. But when comparing it to its historical volatility, iShares Canadian HYBrid is 29.3 times less risky than In Touch. It trades about 0.14 of its potential returns per unit of risk. In Touch Survey Systems is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 36.00 in In Touch Survey Systems on September 12, 2024 and sell it today you would earn a total of 23.00 from holding In Touch Survey Systems or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. In Touch Survey Systems
Performance |
| Timeline |
| iShares Canadian HYBrid |
| In Touch Survey |
IShares Canadian and In Touch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and In Touch
The main advantage of trading using opposite IShares Canadian and In Touch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, In Touch 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 In Touch will offset losses from the drop in In Touch'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 |
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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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