Correlation Between IShares Canadian and Inventronics
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Inventronics 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 Inventronics 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 Inventronics, you can compare the effects of market volatilities on IShares Canadian and Inventronics 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 Inventronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Inventronics.
Diversification Opportunities for IShares Canadian and Inventronics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Inventronics is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Inventronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventronics 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 Inventronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventronics has no effect on the direction of IShares Canadian i.e., IShares Canadian and Inventronics go up and down completely randomly.
Pair Corralation between IShares Canadian and Inventronics
Assuming the 90 days trading horizon IShares Canadian is expected to generate 4.53 times less return on investment than Inventronics. But when comparing it to its historical volatility, iShares Canadian HYBrid is 19.23 times less risky than Inventronics. It trades about 0.18 of its potential returns per unit of risk. Inventronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Inventronics on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Inventronics or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Inventronics
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Inventronics |
IShares Canadian and Inventronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Inventronics
The main advantage of trading using opposite IShares Canadian and Inventronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Inventronics 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 Inventronics will offset losses from the drop in Inventronics' long position.| IShares Canadian vs. Global X Active | IShares Canadian vs. Brompton Flaherty Crumrine | IShares Canadian vs. CIBC Core Fixed | IShares Canadian vs. BMO Aggregate Bond |
| Inventronics vs. Caldwell Partners International | Inventronics vs. Goodfellow | Inventronics vs. Supremex | Inventronics vs. Velan Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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