Correlation Between IShares Canadian and IShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and IShares Global 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 IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian Short and iShares Global REIT, you can compare the effects of market volatilities on IShares Canadian and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and IShares Global.
Diversification Opportunities for IShares Canadian and IShares Global
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Short and iShares Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global REIT 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 Short are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global REIT has no effect on the direction of IShares Canadian i.e., IShares Canadian and IShares Global go up and down completely randomly.
Pair Corralation between IShares Canadian and IShares Global
Assuming the 90 days trading horizon iShares Canadian Short is expected to generate 0.18 times more return on investment than IShares Global. However, iShares Canadian Short is 5.44 times less risky than IShares Global. It trades about -0.02 of its potential returns per unit of risk. iShares Global REIT is currently generating about -0.02 per unit of risk. If you would invest 2,670 in iShares Canadian Short on August 31, 2024 and sell it today you would lose (3.00) from holding iShares Canadian Short or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
iShares Canadian Short vs. iShares Global REIT
Performance |
| Timeline |
| iShares Canadian Short |
| iShares Global REIT |
IShares Canadian and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and IShares Global
The main advantage of trading using opposite IShares Canadian and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| IShares Canadian vs. iShares Canadian Universe | IShares Canadian vs. iShares Canadian Real | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Core Canadian |
| IShares Global vs. iShares Core REIT | IShares Global vs. Schwab REIT ETF | IShares Global vs. Global X SuperDividend | IShares Global vs. Fidelity MSCI Real |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |