Correlation Between IShares Canadian and Medicure
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Medicure 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 Medicure 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 Medicure, you can compare the effects of market volatilities on IShares Canadian and Medicure 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 Medicure. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Medicure.
Diversification Opportunities for IShares Canadian and Medicure
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Medicure is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Medicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicure 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 Medicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicure has no effect on the direction of IShares Canadian i.e., IShares Canadian and Medicure go up and down completely randomly.
Pair Corralation between IShares Canadian and Medicure
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.86 times less return on investment than Medicure. But when comparing it to its historical volatility, iShares Canadian HYBrid is 6.82 times less risky than Medicure. It trades about 0.07 of its potential returns per unit of risk. Medicure is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Medicure on September 14, 2024 and sell it today you would lose (14.00) from holding Medicure or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Medicure
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Medicure |
IShares Canadian and Medicure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Medicure
The main advantage of trading using opposite IShares Canadian and Medicure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Medicure 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 Medicure will offset losses from the drop in Medicure's long position.| IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. BMO Mid Corporate | IShares Canadian vs. Global X Active | IShares Canadian vs. iShares 1 10Yr Laddered |
| Medicure vs. Decibel Cannabis | Medicure vs. iShares Canadian HYBrid | Medicure vs. Altagas Cum Red | Medicure vs. iShares Fundamental Hedged |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |