Correlation Between IShares Canadian and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Northstar Clean 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 Northstar Clean 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 Northstar Clean Technologies, you can compare the effects of market volatilities on IShares Canadian and Northstar Clean 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 Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Northstar Clean.
Diversification Opportunities for IShares Canadian and Northstar Clean
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Northstar is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech 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 Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of IShares Canadian i.e., IShares Canadian and Northstar Clean go up and down completely randomly.
Pair Corralation between IShares Canadian and Northstar Clean
Assuming the 90 days trading horizon IShares Canadian is expected to generate 8.99 times less return on investment than Northstar Clean. But when comparing it to its historical volatility, iShares Canadian HYBrid is 11.25 times less risky than Northstar Clean. It trades about 0.23 of its potential returns per unit of risk. Northstar Clean Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Northstar Clean Technologies on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Northstar Clean Technologies or generate 16.0% 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. Northstar Clean Technologies
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Northstar Clean Tech |
IShares Canadian and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Northstar Clean
The main advantage of trading using opposite IShares Canadian and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean's long position.| IShares Canadian vs. Global X Active | IShares Canadian vs. Brompton Flaherty Crumrine | IShares Canadian vs. CIBC Core Fixed | IShares Canadian vs. BMO Aggregate Bond |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |