Correlation Between Mackenzie Canadian and IShares Jantzi
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and IShares Jantzi 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 Jantzi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Equity and iShares Jantzi Social, you can compare the effects of market volatilities on Mackenzie Canadian and IShares Jantzi 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 Jantzi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and IShares Jantzi.
Diversification Opportunities for Mackenzie Canadian and IShares Jantzi
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mackenzie and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Equity and iShares Jantzi Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Jantzi Social 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 Equity are associated (or correlated) with IShares Jantzi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Jantzi Social has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and IShares Jantzi go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and IShares Jantzi
Assuming the 90 days trading horizon Mackenzie Canadian is expected to generate 1.08 times less return on investment than IShares Jantzi. But when comparing it to its historical volatility, Mackenzie Canadian Equity is 1.65 times less risky than IShares Jantzi. It trades about 0.69 of its potential returns per unit of risk. iShares Jantzi Social is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 3,557 in iShares Jantzi Social on September 1, 2024 and sell it today you would earn a total of 249.00 from holding iShares Jantzi Social or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mackenzie Canadian Equity vs. iShares Jantzi Social
Performance |
| Timeline |
| Mackenzie Canadian Equity |
| iShares Jantzi Social |
Mackenzie Canadian and IShares Jantzi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and IShares Jantzi
The main advantage of trading using opposite Mackenzie Canadian and IShares Jantzi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, IShares Jantzi 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 Jantzi will offset losses from the drop in IShares Jantzi's long position.| Mackenzie Canadian vs. Mackenzie Large Cap | Mackenzie Canadian vs. Goldman Sachs ActiveBeta | Mackenzie Canadian vs. BMO MSCI EAFE | Mackenzie Canadian vs. BMO Long Federal |
| IShares Jantzi vs. iShares Convertible Bond | IShares Jantzi vs. iShares SP Mid Cap | IShares Jantzi vs. iShares Edge MSCI | IShares Jantzi vs. iShares Flexible 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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