Correlation Between IShares Canadian and ISign Media
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and ISign Media 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 ISign Media 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 iSign Media Solutions, you can compare the effects of market volatilities on IShares Canadian and ISign Media 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 ISign Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and ISign Media.
Diversification Opportunities for IShares Canadian and ISign Media
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and ISign is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and iSign Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSign Media Solutions 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 ISign Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSign Media Solutions has no effect on the direction of IShares Canadian i.e., IShares Canadian and ISign Media go up and down completely randomly.
Pair Corralation between IShares Canadian and ISign Media
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.43 times more return on investment than ISign Media. However, iShares Canadian HYBrid is 2.35 times less risky than ISign Media. It trades about 0.17 of its potential returns per unit of risk. iSign Media Solutions is currently generating about 0.03 per unit of risk. If you would invest 1,973 in iShares Canadian HYBrid on September 12, 2024 and sell it today you would earn a total of 25.00 from holding iShares Canadian HYBrid or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. iSign Media Solutions
Performance |
| Timeline |
| iShares Canadian HYBrid |
| iSign Media Solutions |
IShares Canadian and ISign Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and ISign Media
The main advantage of trading using opposite IShares Canadian and ISign Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, ISign Media 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 ISign Media will offset losses from the drop in ISign Media'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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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