Correlation Between IShares Canadian and Mammoth Resources
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Mammoth Resources 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 Mammoth Resources 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 Mammoth Resources Corp, you can compare the effects of market volatilities on IShares Canadian and Mammoth Resources 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 Mammoth Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Mammoth Resources.
Diversification Opportunities for IShares Canadian and Mammoth Resources
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Mammoth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Mammoth Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Resources Corp 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 Mammoth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Resources Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and Mammoth Resources go up and down completely randomly.
Pair Corralation between IShares Canadian and Mammoth Resources
Assuming the 90 days trading horizon IShares Canadian is expected to generate 20.94 times less return on investment than Mammoth Resources. But when comparing it to its historical volatility, iShares Canadian HYBrid is 51.23 times less risky than Mammoth Resources. It trades about 0.15 of its potential returns per unit of risk. Mammoth Resources Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Mammoth Resources Corp on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Mammoth Resources Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Mammoth Resources Corp
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Mammoth Resources Corp |
IShares Canadian and Mammoth Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Mammoth Resources
The main advantage of trading using opposite IShares Canadian and Mammoth Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Mammoth Resources 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 Mammoth Resources will offset losses from the drop in Mammoth Resources' 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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