Correlation Between Wealthsimple North and BetaPro SPTSX

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

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

Diversification Opportunities for Wealthsimple North and BetaPro SPTSX

-0.58

Correlation Coefficient

Wealthsimple North  BetaPro SPTSX

Excellent diversification

The 3 months correlation between Wealthsimple and BetaPro is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple North American and BetaPro SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro SPTSX 60 and Wealthsimple North 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 Wealthsimple North American are associated (or correlated) with BetaPro SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro SPTSX 60 has no effect on the direction of Wealthsimple North i.e., Wealthsimple North and BetaPro SPTSX go up and down completely randomly.

Pair Corralation between Wealthsimple North and BetaPro SPTSX

Assuming the 90 days trading horizon Wealthsimple North American is expected to generate 0.22 times more return on investment than BetaPro SPTSX. However, Wealthsimple North American is 4.65 times less risky than BetaPro SPTSX. It trades about 0.08 of its potential returns per unit of risk. BetaPro SPTSX 60 is currently generating about -0.18 per unit of risk. If you would invest  2,264  in Wealthsimple North American on August 31, 2025 and sell it today you would earn a total of  34.00  from holding Wealthsimple North American or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wealthsimple North American  vs.  BetaPro SPTSX 60

Wealthsimple North

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthsimple North American are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Wealthsimple North is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BetaPro SPTSX 60

Risk-Adjusted Performance

Weakest

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 basic indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Wealthsimple North and BetaPro SPTSX

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

The idea behind Wealthsimple North American and BetaPro SPTSX 60 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.