Correlation Between Mackenzie International and IShares High
Can any of the company-specific risk be diversified away by investing in both Mackenzie International and IShares High 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 International and IShares High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie International Equity and iShares High Dividend, you can compare the effects of market volatilities on Mackenzie International and IShares High 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 International with a short position of IShares High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie International and IShares High.
Diversification Opportunities for Mackenzie International and IShares High
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mackenzie and IShares is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie International Equity and iShares High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares High Dividend and Mackenzie International 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 International Equity are associated (or correlated) with IShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares High Dividend has no effect on the direction of Mackenzie International i.e., Mackenzie International and IShares High go up and down completely randomly.
Pair Corralation between Mackenzie International and IShares High
Assuming the 90 days trading horizon Mackenzie International is expected to generate 3.77 times less return on investment than IShares High. But when comparing it to its historical volatility, Mackenzie International Equity is 1.16 times less risky than IShares High. It trades about 0.07 of its potential returns per unit of risk. iShares High Dividend is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,412 in iShares High Dividend on December 1, 2024 and sell it today you would earn a total of 132.00 from holding iShares High Dividend or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie International Equity vs. iShares High Dividend
Performance |
| Timeline |
| Mackenzie International |
| iShares High Dividend |
Mackenzie International and IShares High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie International and IShares High
The main advantage of trading using opposite Mackenzie International and IShares High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie International position performs unexpectedly, IShares High 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 High will offset losses from the drop in IShares High's long position.The idea behind Mackenzie International Equity and iShares High Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| IShares High vs. iShares Core MSCI | IShares High vs. iShares High Dividend | IShares High vs. iShares Core MSCI | IShares High vs. iShares Core SP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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