Correlation Between Mackenzie Core and IShares Core
Can any of the company-specific risk be diversified away by investing in both Mackenzie Core and IShares Core 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 Mackenzie Core and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Core Plus and iShares Core Canadian, you can compare the effects of market volatilities on Mackenzie Core and IShares Core 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 Mackenzie Core with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and IShares Core.
Diversification Opportunities for Mackenzie Core and IShares Core
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mackenzie and IShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and iShares Core Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Canadian and Mackenzie Core 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 Mackenzie Core Plus are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Canadian has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and IShares Core go up and down completely randomly.
Pair Corralation between Mackenzie Core and IShares Core
Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.43 times less return on investment than IShares Core. In addition to that, Mackenzie Core is 2.37 times more volatile than iShares Core Canadian. It trades about 0.04 of its total potential returns per unit of risk. iShares Core Canadian is currently generating about 0.12 per unit of volatility. If you would invest 1,673 in iShares Core Canadian on August 24, 2024 and sell it today you would earn a total of 207.00 from holding iShares Core Canadian or generate 12.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Core Plus vs. iShares Core Canadian
Performance |
| Timeline |
| Mackenzie Core Plus |
| iShares Core Canadian |
Mackenzie Core and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Core and IShares Core
The main advantage of trading using opposite Mackenzie Core and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
| IShares Core vs. Mackenzie Canadian Aggregate | IShares Core vs. Mackenzie Canadian Short | IShares Core vs. Mackenzie Core Plus | IShares Core vs. Mackenzie Investment Grade |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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