Correlation Between IShares Canadian and Life Banc
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Life Banc 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 Life Banc 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 Life Banc Split, you can compare the effects of market volatilities on IShares Canadian and Life Banc 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 Life Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Life Banc.
Diversification Opportunities for IShares Canadian and Life Banc
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Life is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Life Banc Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Banc Split 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 Life Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Banc Split has no effect on the direction of IShares Canadian i.e., IShares Canadian and Life Banc go up and down completely randomly.
Pair Corralation between IShares Canadian and Life Banc
Assuming the 90 days trading horizon IShares Canadian is expected to generate 7.18 times less return on investment than Life Banc. But when comparing it to its historical volatility, iShares Canadian HYBrid is 3.25 times less risky than Life Banc. It trades about 0.17 of its potential returns per unit of risk. Life Banc Split is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 771.00 in Life Banc Split on September 12, 2024 and sell it today you would earn a total of 181.00 from holding Life Banc Split or generate 23.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Life Banc Split
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Life Banc Split |
IShares Canadian and Life Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Life Banc
The main advantage of trading using opposite IShares Canadian and Life Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Life Banc 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 Life Banc will offset losses from the drop in Life Banc'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 |
| Life Banc vs. Global Dividend Growth | Life Banc vs. Dividend Growth Split | Life Banc vs. Brompton Split Banc | Life Banc vs. Financial 15 Split |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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