Correlation Between IShares 1 and Mackenzie Canadian
Can any of the company-specific risk be diversified away by investing in both IShares 1 and Mackenzie 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 IShares 1 and Mackenzie Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 1 5 Year and Mackenzie Canadian Short, you can compare the effects of market volatilities on IShares 1 and Mackenzie 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 IShares 1 with a short position of Mackenzie Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and Mackenzie Canadian.
Diversification Opportunities for IShares 1 and Mackenzie Canadian
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Mackenzie is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares 1 5 Year and Mackenzie Canadian Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian Short and IShares 1 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 iShares 1 5 Year are associated (or correlated) with Mackenzie Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian Short has no effect on the direction of IShares 1 i.e., IShares 1 and Mackenzie Canadian go up and down completely randomly.
Pair Corralation between IShares 1 and Mackenzie Canadian
Assuming the 90 days trading horizon iShares 1 5 Year is expected to generate 0.88 times more return on investment than Mackenzie Canadian. However, iShares 1 5 Year is 1.14 times less risky than Mackenzie Canadian. It trades about 0.22 of its potential returns per unit of risk. Mackenzie Canadian Short is currently generating about 0.19 per unit of risk. If you would invest 1,738 in iShares 1 5 Year on August 28, 2024 and sell it today you would earn a total of 77.00 from holding iShares 1 5 Year or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
iShares 1 5 Year vs. Mackenzie Canadian Short
Performance |
| Timeline |
| iShares 1 5 |
| Mackenzie Canadian Short |
IShares 1 and Mackenzie Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares 1 and Mackenzie Canadian
The main advantage of trading using opposite IShares 1 and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 position performs unexpectedly, Mackenzie 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 Mackenzie Canadian will offset losses from the drop in Mackenzie Canadian's long position.| IShares 1 vs. Mackenzie Canadian Aggregate | IShares 1 vs. Mackenzie Core Plus | IShares 1 vs. Mackenzie Investment Grade | IShares 1 vs. Mackenzie Core Plus |
| Mackenzie Canadian vs. Mackenzie Canadian Aggregate | Mackenzie Canadian vs. Mackenzie Core Plus | Mackenzie Canadian vs. Mackenzie Investment Grade | Mackenzie Canadian vs. Mackenzie Core Plus |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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