Correlation Between BetaPro Canadian and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both BetaPro Canadian and IShares SPTSX 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 BetaPro Canadian and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Canadian Gold and iShares SPTSX Capped, you can compare the effects of market volatilities on BetaPro Canadian and IShares SPTSX 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 BetaPro Canadian with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Canadian and IShares SPTSX.
Diversification Opportunities for BetaPro Canadian and IShares SPTSX
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and BetaPro 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 BetaPro Canadian Gold are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and IShares SPTSX go up and down completely randomly.
Pair Corralation between BetaPro Canadian and IShares SPTSX
Assuming the 90 days trading horizon BetaPro Canadian is expected to generate 8.42 times less return on investment than IShares SPTSX. In addition to that, BetaPro Canadian is 2.61 times more volatile than iShares SPTSX Capped. It trades about 0.01 of its total potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.27 per unit of volatility. If you would invest 5,598 in iShares SPTSX Capped on September 14, 2024 and sell it today you would earn a total of 1,486 from holding iShares SPTSX Capped or generate 26.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BetaPro Canadian Gold vs. iShares SPTSX Capped
Performance |
Timeline |
BetaPro Canadian Gold |
iShares SPTSX Capped |
BetaPro Canadian and IShares SPTSX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BetaPro Canadian and IShares SPTSX
The main advantage of trading using opposite BetaPro Canadian and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Canadian position performs unexpectedly, IShares SPTSX 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 SPTSX will offset losses from the drop in IShares SPTSX's long position.BetaPro Canadian vs. BetaPro Gold Bullion | BetaPro Canadian vs. BetaPro NASDAQ 100 2x | BetaPro Canadian vs. BetaPro SP TSX | BetaPro Canadian vs. BetaPro SP TSX |
IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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