Correlation Between Mackenzie Emerging and IShares IG
Can any of the company-specific risk be diversified away by investing in both Mackenzie Emerging 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 Emerging 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 Emerging Markets and iShares IG Corporate, you can compare the effects of market volatilities on Mackenzie Emerging 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 Emerging with a short position of IShares IG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Emerging and IShares IG.
Diversification Opportunities for Mackenzie Emerging and IShares IG
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mackenzie and IShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Emerging Markets 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 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 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 Emerging i.e., Mackenzie Emerging and IShares IG go up and down completely randomly.
Pair Corralation between Mackenzie Emerging and IShares IG
Assuming the 90 days trading horizon Mackenzie Emerging Markets is expected to generate 1.01 times more return on investment than IShares IG. However, Mackenzie Emerging is 1.01 times more volatile than iShares IG Corporate. It trades about 0.07 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 7,396 in Mackenzie Emerging Markets on September 14, 2024 and sell it today you would earn a total of 558.00 from holding Mackenzie Emerging Markets or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Mackenzie Emerging Markets vs. iShares IG Corporate
Performance |
| Timeline |
| Mackenzie Emerging |
| iShares IG Corporate |
Mackenzie Emerging and IShares IG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Emerging and IShares IG
The main advantage of trading using opposite Mackenzie Emerging and IShares IG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Emerging 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 Emerging vs. iShares IG Corporate | Mackenzie Emerging vs. iShares 1 10Yr Laddered | Mackenzie Emerging vs. iShares Floating Rate | Mackenzie Emerging vs. iShares Convertible Bond |
| IShares IG vs. iShares JP Morgan | IShares IG vs. iShares High Yield | IShares IG vs. iShares 1 10Yr Laddered | IShares IG vs. iShares Canadian HYBrid |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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