Correlation Between Mackenzie TIPS and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Mackenzie TIPS and IShares SPTSX 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 TIPS and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie TIPS Index and iShares SPTSX 60, you can compare the effects of market volatilities on Mackenzie TIPS and IShares SPTSX 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 TIPS with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie TIPS and IShares SPTSX.
Diversification Opportunities for Mackenzie TIPS and IShares SPTSX
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mackenzie and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie TIPS Index and iShares SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX 60 and Mackenzie TIPS 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 TIPS Index are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX 60 has no effect on the direction of Mackenzie TIPS i.e., Mackenzie TIPS and IShares SPTSX go up and down completely randomly.
Pair Corralation between Mackenzie TIPS and IShares SPTSX
Assuming the 90 days trading horizon Mackenzie TIPS is expected to generate 4.79 times less return on investment than IShares SPTSX. But when comparing it to its historical volatility, Mackenzie TIPS Index is 2.0 times less risky than IShares SPTSX. It trades about 0.06 of its potential returns per unit of risk. iShares SPTSX 60 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,871 in iShares SPTSX 60 on September 12, 2024 and sell it today you would earn a total of 988.00 from holding iShares SPTSX 60 or generate 34.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie TIPS Index vs. iShares SPTSX 60
Performance |
| Timeline |
| Mackenzie TIPS Index |
| iShares SPTSX 60 |
Mackenzie TIPS and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie TIPS and IShares SPTSX
The main advantage of trading using opposite Mackenzie TIPS and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie TIPS position performs unexpectedly, IShares SPTSX 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 SPTSX will offset losses from the drop in IShares SPTSX's long position.| Mackenzie TIPS vs. iShares SPTSX 60 | Mackenzie TIPS vs. iShares Core SP | Mackenzie TIPS vs. iShares Core SPTSX | Mackenzie TIPS vs. BMO Aggregate Bond |
| IShares SPTSX vs. iShares Core SP | IShares SPTSX vs. iShares Core SPTSX | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |