Correlation Between Mackenzie Canadian and IShares IG
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and IShares IG 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 IG 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 IG Corporate, you can compare the effects of market volatilities on Mackenzie Canadian and IShares IG 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 IG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and IShares IG.
Diversification Opportunities for Mackenzie Canadian and IShares IG
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mackenzie and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Aggregate and iShares IG Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares IG Corporate 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 IG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares IG Corporate has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and IShares IG go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and IShares IG
Assuming the 90 days trading horizon Mackenzie Canadian Aggregate is expected to generate 0.79 times more return on investment than IShares IG. However, Mackenzie Canadian Aggregate is 1.26 times less risky than IShares IG. It trades about 0.03 of its potential returns per unit of risk. iShares IG Corporate is currently generating about 0.02 per unit of risk. If you would invest 8,787 in Mackenzie Canadian Aggregate on August 28, 2024 and sell it today you would earn a total of 536.00 from holding Mackenzie Canadian Aggregate or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Aggregate vs. iShares IG Corporate
Performance |
| Timeline |
| Mackenzie Canadian |
| iShares IG Corporate |
Mackenzie Canadian and IShares IG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and IShares IG
The main advantage of trading using opposite Mackenzie Canadian and IShares IG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, IShares IG 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 IG will offset losses from the drop in IShares IG's long position.| Mackenzie Canadian vs. Mackenzie Core Plus | Mackenzie Canadian vs. Mackenzie Unconstrained Bond | Mackenzie Canadian vs. Mackenzie Floating Rate | Mackenzie Canadian vs. Mackenzie Canadian Short |
| IShares IG vs. Mackenzie High Yield | IShares IG vs. Mackenzie Core Plus | IShares IG vs. Mackenzie Canadian Aggregate | IShares IG 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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