Correlation Between IShares Canadian and Xtract One
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Xtract One 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 Xtract One 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 Xtract One Technologies, you can compare the effects of market volatilities on IShares Canadian and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Xtract One.
Diversification Opportunities for IShares Canadian and Xtract One
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Xtract is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of IShares Canadian i.e., IShares Canadian and Xtract One go up and down completely randomly.
Pair Corralation between IShares Canadian and Xtract One
Assuming the 90 days trading horizon IShares Canadian is expected to generate 3.67 times less return on investment than Xtract One. But when comparing it to its historical volatility, iShares Canadian HYBrid is 9.68 times less risky than Xtract One. It trades about 0.07 of its potential returns per unit of risk. Xtract One Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Xtract One Technologies on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Xtract One Technologies or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Xtract One Technologies
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Xtract One Technologies |
IShares Canadian and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Xtract One
The main advantage of trading using opposite IShares Canadian and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One'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 |
| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets |