Correlation Between IShares Core and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and Fidelity Canadian 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 Fidelity Canadian 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 Fidelity Canadian Monthly, you can compare the effects of market volatilities on IShares Core and Fidelity Canadian 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 Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Canadian.
Diversification Opportunities for IShares Core and Fidelity Canadian
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and Fidelity Canadian Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Monthly 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 Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Monthly has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Canadian go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity Canadian
Assuming the 90 days trading horizon iShares Core SPTSX is expected to generate 1.71 times more return on investment than Fidelity Canadian. However, IShares Core is 1.71 times more volatile than Fidelity Canadian Monthly. It trades about 0.2 of its potential returns per unit of risk. Fidelity Canadian Monthly is currently generating about 0.19 per unit of risk. If you would invest 3,484 in iShares Core SPTSX on August 30, 2024 and sell it today you would earn a total of 598.00 from holding iShares Core SPTSX or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SPTSX vs. Fidelity Canadian Monthly
Performance |
| Timeline |
| iShares Core SPTSX |
| Fidelity Canadian Monthly |
IShares Core and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity Canadian
The main advantage of trading using opposite IShares Core and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Fidelity Canadian 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 Fidelity Canadian will offset losses from the drop in Fidelity Canadian'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 |
| Fidelity Canadian vs. Fidelity Global Monthly | Fidelity Canadian vs. Fidelity High Dividend | Fidelity Canadian vs. Fidelity International High | Fidelity Canadian vs. Fidelity Canadian High |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |