Correlation Between IShares Diversified and CI Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Diversified and CI 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 Diversified and CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Diversified Monthly and CI Canadian REIT, you can compare the effects of market volatilities on IShares Diversified and CI 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 Diversified with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Diversified and CI Canadian.
Diversification Opportunities for IShares Diversified and CI Canadian
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and RIT is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding iShares Diversified Monthly and CI Canadian REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian REIT and IShares Diversified 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 Diversified Monthly are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian REIT has no effect on the direction of IShares Diversified i.e., IShares Diversified and CI Canadian go up and down completely randomly.
Pair Corralation between IShares Diversified and CI Canadian
Assuming the 90 days trading horizon iShares Diversified Monthly is expected to generate 0.39 times more return on investment than CI Canadian. However, iShares Diversified Monthly is 2.57 times less risky than CI Canadian. It trades about 0.36 of its potential returns per unit of risk. CI Canadian REIT is currently generating about -0.07 per unit of risk. If you would invest 1,121 in iShares Diversified Monthly on August 31, 2024 and sell it today you would earn a total of 24.00 from holding iShares Diversified Monthly or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Diversified Monthly vs. CI Canadian REIT
Performance |
| Timeline |
| iShares Diversified |
| CI Canadian REIT |
IShares Diversified and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Diversified and CI Canadian
The main advantage of trading using opposite IShares Diversified and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Diversified position performs unexpectedly, CI 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| IShares Diversified vs. iShares SPTSX Capped | IShares Diversified vs. iShares Canadian Select | IShares Diversified vs. iShares SPTSX Completion | IShares Diversified vs. iShares Canadian Real |
| CI Canadian vs. BMO Equal Weight | CI Canadian vs. Vanguard FTSE Canadian | CI Canadian vs. iShares SPTSX Capped | CI Canadian vs. BMO Equal Weight |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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