Correlation Between IShares Canadian and Westaim Corp
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Westaim Corp 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 Westaim Corp 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 Westaim Corp, you can compare the effects of market volatilities on IShares Canadian and Westaim Corp 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 Westaim Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Westaim Corp.
Diversification Opportunities for IShares Canadian and Westaim Corp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Westaim is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Westaim Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westaim 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 Westaim Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westaim Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and Westaim Corp go up and down completely randomly.
Pair Corralation between IShares Canadian and Westaim Corp
Assuming the 90 days trading horizon IShares Canadian is expected to generate 3.09 times less return on investment than Westaim Corp. But when comparing it to its historical volatility, iShares Canadian HYBrid is 1.9 times less risky than Westaim Corp. It trades about 0.07 of its potential returns per unit of risk. Westaim Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 260.00 in Westaim Corp on September 12, 2024 and sell it today you would earn a total of 264.00 from holding Westaim Corp or generate 101.54% 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. Westaim Corp
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Westaim Corp |
IShares Canadian and Westaim Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Westaim Corp
The main advantage of trading using opposite IShares Canadian and Westaim Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Westaim Corp 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 Westaim Corp will offset losses from the drop in Westaim Corp's 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 |
| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
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.
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