Correlation Between Mackenzie Canadian and IShares 1
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and IShares 1 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 Canadian and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Aggregate and iShares 1 5 Year, you can compare the effects of market volatilities on Mackenzie Canadian and IShares 1 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 Canadian with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and IShares 1.
Diversification Opportunities for Mackenzie Canadian and IShares 1
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mackenzie and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Aggregate and iShares 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 5 and Mackenzie Canadian 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 Canadian Aggregate are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 5 has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and IShares 1 go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and IShares 1
Assuming the 90 days trading horizon Mackenzie Canadian Aggregate is expected to generate 2.5 times more return on investment than IShares 1. However, Mackenzie Canadian is 2.5 times more volatile than iShares 1 5 Year. It trades about 0.09 of its potential returns per unit of risk. iShares 1 5 Year is currently generating about -0.03 per unit of risk. If you would invest 9,295 in Mackenzie Canadian Aggregate on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Mackenzie Canadian Aggregate or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Aggregate vs. iShares 1 5 Year
Performance |
| Timeline |
| Mackenzie Canadian |
| iShares 1 5 |
Mackenzie Canadian and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and IShares 1
The main advantage of trading using opposite Mackenzie Canadian and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, IShares 1 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 1 will offset losses from the drop in IShares 1's long position.| Mackenzie Canadian vs. BMO Aggregate Bond | Mackenzie Canadian vs. iShares Canadian Universe | Mackenzie Canadian vs. BMO Core Plus | Mackenzie Canadian vs. BMO Discount Bond |
| IShares 1 vs. iShares 1 5 Year | IShares 1 vs. iShares Premium Money | IShares 1 vs. iShares Canadian Government | IShares 1 vs. iShares Global Monthly |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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