Correlation Between Energy Leaders and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Energy Leaders 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 Energy Leaders and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Leaders Plus and iShares Canadian Universe, you can compare the effects of market volatilities on Energy Leaders 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 Energy Leaders with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Leaders and IShares Canadian.
Diversification Opportunities for Energy Leaders and IShares Canadian
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energy and IShares is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Energy Leaders Plus and iShares Canadian Universe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Universe and Energy Leaders 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 Energy Leaders Plus 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 Universe has no effect on the direction of Energy Leaders i.e., Energy Leaders and IShares Canadian go up and down completely randomly.
Pair Corralation between Energy Leaders and IShares Canadian
Assuming the 90 days trading horizon Energy Leaders Plus is expected to under-perform the IShares Canadian. In addition to that, Energy Leaders is 2.43 times more volatile than iShares Canadian Universe. It trades about -0.06 of its total potential returns per unit of risk. iShares Canadian Universe is currently generating about 0.08 per unit of volatility. If you would invest 2,728 in iShares Canadian Universe on April 7, 2024 and sell it today you would earn a total of 35.00 from holding iShares Canadian Universe or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Energy Leaders Plus vs. iShares Canadian Universe
Performance |
Timeline |
Energy Leaders Plus |
iShares Canadian Universe |
Energy Leaders and IShares Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Leaders and IShares Canadian
The main advantage of trading using opposite Energy Leaders and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Leaders 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.Energy Leaders vs. Tech Leaders Income | Energy Leaders vs. Brompton Global Dividend | Energy Leaders vs. Brompton European Dividend | Energy Leaders vs. Solar Alliance Energy |
IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real | IShares Canadian vs. iShares Core Canadian |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |