Correlation Between IShares Core and Mackenzie Balanced
Can any of the company-specific risk be diversified away by investing in both IShares Core and Mackenzie Balanced 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 IShares Core and Mackenzie Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Balanced and Mackenzie Balanced Allocation, you can compare the effects of market volatilities on IShares Core and Mackenzie Balanced 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 IShares Core with a short position of Mackenzie Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Mackenzie Balanced.
Diversification Opportunities for IShares Core and Mackenzie Balanced
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Mackenzie is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Balanced and Mackenzie Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Balanced and IShares Core 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 iShares Core Balanced are associated (or correlated) with Mackenzie Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Balanced has no effect on the direction of IShares Core i.e., IShares Core and Mackenzie Balanced go up and down completely randomly.
Pair Corralation between IShares Core and Mackenzie Balanced
Assuming the 90 days trading horizon IShares Core is expected to generate 1.18 times less return on investment than Mackenzie Balanced. But when comparing it to its historical volatility, iShares Core Balanced is 1.08 times less risky than Mackenzie Balanced. It trades about 0.17 of its potential returns per unit of risk. Mackenzie Balanced Allocation is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,499 in Mackenzie Balanced Allocation on August 25, 2024 and sell it today you would earn a total of 38.00 from holding Mackenzie Balanced Allocation or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core Balanced vs. Mackenzie Balanced Allocation
Performance |
| Timeline |
| iShares Core Balanced |
| Mackenzie Balanced |
IShares Core and Mackenzie Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Mackenzie Balanced
The main advantage of trading using opposite IShares Core and Mackenzie Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Mackenzie Balanced 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 Mackenzie Balanced will offset losses from the drop in Mackenzie Balanced's long position.| IShares Core vs. iShares Core Growth | IShares Core vs. Vanguard Balanced Portfolio | IShares Core vs. BMO Balanced ETF | IShares Core vs. Vanguard Conservative ETF |
| Mackenzie Balanced vs. Mackenzie Developed ex North | Mackenzie Balanced vs. Mackenzie Global Sustainable | Mackenzie Balanced vs. Mackenzie Aggregate Bond | Mackenzie Balanced vs. Mackenzie Canadian Ultra |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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