Correlation Between IShares Canadian and Kraken Robotics
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Kraken Robotics 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 Kraken Robotics 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 Kraken Robotics, you can compare the effects of market volatilities on IShares Canadian and Kraken Robotics 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 Kraken Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Kraken Robotics.
Diversification Opportunities for IShares Canadian and Kraken Robotics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Kraken is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics 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 Kraken Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Robotics has no effect on the direction of IShares Canadian i.e., IShares Canadian and Kraken Robotics go up and down completely randomly.
Pair Corralation between IShares Canadian and Kraken Robotics
Assuming the 90 days trading horizon IShares Canadian is expected to generate 17.25 times less return on investment than Kraken Robotics. But when comparing it to its historical volatility, iShares Canadian HYBrid is 14.4 times less risky than Kraken Robotics. It trades about 0.16 of its potential returns per unit of risk. Kraken Robotics is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Kraken Robotics on September 3, 2024 and sell it today you would earn a total of 135.00 from holding Kraken Robotics or generate 135.0% 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. Kraken Robotics
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Kraken Robotics |
IShares Canadian and Kraken Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Kraken Robotics
The main advantage of trading using opposite IShares Canadian and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Kraken Robotics 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 Kraken Robotics will offset losses from the drop in Kraken Robotics' 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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