Correlation Between IShares Canadian and Storage Vault
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Storage Vault 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 Storage Vault 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 Storage Vault Canada, you can compare the effects of market volatilities on IShares Canadian and Storage Vault 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 Storage Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Storage Vault.
Diversification Opportunities for IShares Canadian and Storage Vault
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Storage is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Storage Vault Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storage Vault Canada 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 Storage Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storage Vault Canada has no effect on the direction of IShares Canadian i.e., IShares Canadian and Storage Vault go up and down completely randomly.
Pair Corralation between IShares Canadian and Storage Vault
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.46 times less return on investment than Storage Vault. But when comparing it to its historical volatility, iShares Canadian HYBrid is 6.09 times less risky than Storage Vault. It trades about 0.17 of its potential returns per unit of risk. Storage Vault Canada is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Storage Vault Canada on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Storage Vault Canada or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Storage Vault Canada
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Storage Vault Canada |
IShares Canadian and Storage Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Storage Vault
The main advantage of trading using opposite IShares Canadian and Storage Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Storage Vault 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 Storage Vault will offset losses from the drop in Storage Vault'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 |
| Storage Vault vs. BSR Real Estate | Storage Vault vs. European Residential Real | Storage Vault vs. Minto Apartment Real | Storage Vault 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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