Correlation Between IShares Core and CIBC Clean
Can any of the company-specific risk be diversified away by investing in both IShares Core and CIBC 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 Core and CIBC Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SPTSX and CIBC Clean Energy, you can compare the effects of market volatilities on IShares Core and CIBC 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 Core with a short position of CIBC Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and CIBC Clean.
Diversification Opportunities for IShares Core and CIBC Clean
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and CIBC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and CIBC Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Clean Energy and IShares Core 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 Core SPTSX are associated (or correlated) with CIBC Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Clean Energy has no effect on the direction of IShares Core i.e., IShares Core and CIBC Clean go up and down completely randomly.
Pair Corralation between IShares Core and CIBC Clean
Assuming the 90 days trading horizon iShares Core SPTSX is expected to generate 0.33 times more return on investment than CIBC Clean. However, iShares Core SPTSX is 3.0 times less risky than CIBC Clean. It trades about 0.3 of its potential returns per unit of risk. CIBC Clean Energy is currently generating about -0.01 per unit of risk. If you would invest 3,819 in iShares Core SPTSX on August 29, 2024 and sell it today you would earn a total of 239.00 from holding iShares Core SPTSX or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
iShares Core SPTSX vs. CIBC Clean Energy
Performance |
| Timeline |
| iShares Core SPTSX |
| CIBC Clean Energy |
IShares Core and CIBC Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and CIBC Clean
The main advantage of trading using opposite IShares Core and CIBC Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, CIBC 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 CIBC Clean will offset losses from the drop in CIBC Clean's long position.| IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares Core SP | IShares Core vs. iShares SPTSX Composite | IShares Core vs. iShares Core MSCI |
| CIBC Clean vs. iShares SPTSX 60 | CIBC Clean vs. iShares Core SP | CIBC Clean vs. iShares Core SPTSX | CIBC Clean 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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