Correlation Between BetaPro SPTSX and IA Clarington

Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and IA Clarington 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 SPTSX and IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BetaPro SPTSX 60 and IA Clarington Strategic, you can compare the effects of market volatilities on BetaPro SPTSX and IA Clarington 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 SPTSX with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and IA Clarington.

Diversification Opportunities for BetaPro SPTSX and IA Clarington

-0.95

Correlation Coefficient

BetaPro SPTSX  IA Clarington

Pay attention - limited upside

The 3 months correlation between BetaPro and ISIF is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and IA Clarington Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Strategic and BetaPro SPTSX 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 SPTSX 60 are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Strategic has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and IA Clarington go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and IA Clarington

Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the IA Clarington. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 1.2 times less risky than IA Clarington. The etf trades about -0.41 of its potential returns per unit of risk. The IA Clarington Strategic is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,158  in IA Clarington Strategic on April 22, 2025 and sell it today you would earn a total of  98.00  from holding IA Clarington Strategic or generate 8.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BetaPro SPTSX 60  vs.  IA Clarington Strategic

BetaPro SPTSX 60

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro SPTSX 60 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

IA Clarington Strategic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IA Clarington Strategic are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IA Clarington may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BetaPro SPTSX and IA Clarington

The main advantage of trading using opposite BetaPro SPTSX and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.

The idea behind BetaPro SPTSX 60 and IA Clarington Strategic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.