Correlation Between IShares SPTSX and Energy Income
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Energy Income 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 SPTSX and Energy Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Energy Income, you can compare the effects of market volatilities on IShares SPTSX and Energy Income 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 SPTSX with a short position of Energy Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Energy Income.
Diversification Opportunities for IShares SPTSX and Energy Income
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Energy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Income and IShares SPTSX 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 SPTSX Capped are associated (or correlated) with Energy Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Income has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Energy Income go up and down completely randomly.
Pair Corralation between IShares SPTSX and Energy Income
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 0.39 times more return on investment than Energy Income. However, iShares SPTSX Capped is 2.57 times less risky than Energy Income. It trades about -0.12 of its potential returns per unit of risk. Energy Income is currently generating about -0.14 per unit of risk. If you would invest 1,587 in iShares SPTSX Capped on September 13, 2024 and sell it today you would lose (33.00) from holding iShares SPTSX Capped or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Energy Income
Performance |
| Timeline |
| iShares SPTSX Capped |
| Energy Income |
IShares SPTSX and Energy Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Energy Income
The main advantage of trading using opposite IShares SPTSX and Energy Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Energy Income 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 Energy Income will offset losses from the drop in Energy Income's long position.| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares Canadian Select | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. BMO Equal Weight |
| Energy Income vs. MINT Income Fund | Energy Income vs. Prime Dividend Corp | Energy Income vs. Canadian High Income | Energy Income vs. Precious Metals And |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |