Correlation Between IShares Canadian and Reitmans
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Reitmans 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 Reitmans 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 Reitmans Limited, you can compare the effects of market volatilities on IShares Canadian and Reitmans 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 Reitmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Reitmans.
Diversification Opportunities for IShares Canadian and Reitmans
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Reitmans is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans Limited 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 Reitmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans Limited has no effect on the direction of IShares Canadian i.e., IShares Canadian and Reitmans go up and down completely randomly.
Pair Corralation between IShares Canadian and Reitmans
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.12 times less return on investment than Reitmans. But when comparing it to its historical volatility, iShares Canadian HYBrid is 6.31 times less risky than Reitmans. It trades about 0.2 of its potential returns per unit of risk. Reitmans Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Reitmans Limited on September 14, 2024 and sell it today you would earn a total of 15.00 from holding Reitmans Limited or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Reitmans Limited
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Reitmans Limited |
IShares Canadian and Reitmans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Reitmans
The main advantage of trading using opposite IShares Canadian and Reitmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Reitmans 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 Reitmans will offset losses from the drop in Reitmans' 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 |
| Reitmans vs. Canada Goose Holdings | Reitmans vs. Spin Master Corp | Reitmans vs. Aritzia | Reitmans vs. iShares Canadian HYBrid |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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