Correlation Between IShares Core and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and IShares 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 IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and iShares Canadian Value, you can compare the effects of market volatilities on IShares Core and IShares 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IShares Canadian.
Diversification Opportunities for IShares Core and IShares Canadian
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and iShares Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Value 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 SP are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian Value has no effect on the direction of IShares Core i.e., IShares Core and IShares Canadian go up and down completely randomly.
Pair Corralation between IShares Core and IShares Canadian
Assuming the 90 days trading horizon iShares Core SP is expected to generate 1.09 times more return on investment than IShares Canadian. However, IShares Core is 1.09 times more volatile than iShares Canadian Value. It trades about 0.11 of its potential returns per unit of risk. iShares Canadian Value is currently generating about 0.08 per unit of risk. If you would invest 4,125 in iShares Core SP on August 29, 2024 and sell it today you would earn a total of 2,138 from holding iShares Core SP or generate 51.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. iShares Canadian Value
Performance |
| Timeline |
| iShares Core SP |
| iShares Canadian Value |
IShares Core and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IShares Canadian
The main advantage of trading using opposite IShares Core and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, IShares 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.| IShares Core vs. BMO Low Volatility | IShares Core vs. BMO MSCI USA | IShares Core vs. BMO Equal Weight | IShares Core vs. BMO Dividend ETF |
| IShares Canadian vs. iShares Canadian Growth | IShares Canadian vs. iShares Canadian Government | IShares Canadian vs. iShares SPTSX Small | IShares Canadian vs. iShares SPTSX Completion |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |