Correlation Between IShares Canadian and Kinaxis
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Kinaxis 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 Kinaxis 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 Kinaxis, you can compare the effects of market volatilities on IShares Canadian and Kinaxis 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 Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Kinaxis.
Diversification Opportunities for IShares Canadian and Kinaxis
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Kinaxis is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis 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 Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of IShares Canadian i.e., IShares Canadian and Kinaxis go up and down completely randomly.
Pair Corralation between IShares Canadian and Kinaxis
Assuming the 90 days trading horizon IShares Canadian is expected to generate 23.22 times less return on investment than Kinaxis. But when comparing it to its historical volatility, iShares Canadian HYBrid is 8.29 times less risky than Kinaxis. It trades about 0.1 of its potential returns per unit of risk. Kinaxis is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 15,608 in Kinaxis on August 28, 2024 and sell it today you would earn a total of 2,112 from holding Kinaxis or generate 13.53% 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. Kinaxis
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Kinaxis |
IShares Canadian and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Kinaxis
The main advantage of trading using opposite IShares Canadian and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' 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 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |