Correlation Between Wealthsimple Shariah and CSX

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

By analyzing existing cross correlation between Wealthsimple Shariah World and CSX Corporation, you can compare the effects of market volatilities on Wealthsimple Shariah and CSX 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 Shariah with a short position of CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and CSX.

Diversification Opportunities for Wealthsimple Shariah and CSX

0.44

Correlation Coefficient

Wealthsimple Shariah  CSX

Very weak diversification

The 3 months correlation between Wealthsimple and CSX is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation and Wealthsimple Shariah 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 Shariah World are associated (or correlated) with CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and CSX go up and down completely randomly.

Pair Corralation between Wealthsimple Shariah and CSX

Assuming the 90 days trading horizon Wealthsimple Shariah World is expected to generate 0.79 times more return on investment than CSX. However, Wealthsimple Shariah World is 1.26 times less risky than CSX. It trades about -0.19 of its potential returns per unit of risk. CSX Corporation is currently generating about -0.29 per unit of risk. If you would invest  3,284  in Wealthsimple Shariah World on August 23, 2025 and sell it today you would lose (109.00) from holding Wealthsimple Shariah World or give up 3.32% of portfolio value over 90 days.

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

Wealthsimple Shariah World  vs.  CSX Corp.

Wealthsimple Shariah

Risk-Adjusted Performance

Weakest

Over the last 90 days Wealthsimple Shariah World has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Wealthsimple Shariah is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CSX Corporation

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in CSX Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, CSX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wealthsimple Shariah and CSX

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

The idea behind Wealthsimple Shariah World and CSX Corporation 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.