Correlation Between Mackenzie Emerging and IShares JP
Can any of the company-specific risk be diversified away by investing in both Mackenzie Emerging and IShares JP 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 Emerging and IShares JP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Emerging Markets and iShares JP Morgan, you can compare the effects of market volatilities on Mackenzie Emerging and IShares JP 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 Emerging with a short position of IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Emerging and IShares JP.
Diversification Opportunities for Mackenzie Emerging and IShares JP
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mackenzie and IShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Emerging Markets and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and Mackenzie Emerging 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 Emerging Markets are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Mackenzie Emerging i.e., Mackenzie Emerging and IShares JP go up and down completely randomly.
Pair Corralation between Mackenzie Emerging and IShares JP
Assuming the 90 days trading horizon Mackenzie Emerging Markets is expected to under-perform the IShares JP. In addition to that, Mackenzie Emerging is 2.34 times more volatile than iShares JP Morgan. It trades about 0.0 of its total potential returns per unit of risk. iShares JP Morgan is currently generating about 0.07 per unit of volatility. If you would invest 1,565 in iShares JP Morgan on October 21, 2024 and sell it today you would earn a total of 6.00 from holding iShares JP Morgan or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Emerging Markets vs. iShares JP Morgan
Performance |
| Timeline |
| Mackenzie Emerging |
| iShares JP Morgan |
Mackenzie Emerging and IShares JP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Emerging and IShares JP
The main advantage of trading using opposite Mackenzie Emerging and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Emerging position performs unexpectedly, IShares JP 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 JP will offset losses from the drop in IShares JP's long position.| Mackenzie Emerging vs. Mackenzie Emerging Markets | Mackenzie Emerging vs. Mackenzie Investment Grade | Mackenzie Emerging vs. Mackenzie Core Plus | Mackenzie Emerging vs. Mackenzie Canadian Aggregate |
| IShares JP vs. iShares IG Corporate | IShares JP vs. iShares 1 10Yr Laddered | IShares JP vs. iShares Floating Rate | IShares JP vs. iShares Convertible Bond |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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