Correlation Between IShares Canadian and Mackenzie Core
Can any of the company-specific risk be diversified away by investing in both IShares Canadian and Mackenzie Core 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 Canadian and Mackenzie Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian Universe and Mackenzie Core Plus, you can compare the effects of market volatilities on IShares Canadian and Mackenzie Core 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 Canadian with a short position of Mackenzie Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Mackenzie Core.
Diversification Opportunities for IShares Canadian and Mackenzie Core
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Mackenzie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Universe and Mackenzie Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Core Plus and IShares Canadian 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 Canadian Universe are associated (or correlated) with Mackenzie Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Core Plus has no effect on the direction of IShares Canadian i.e., IShares Canadian and Mackenzie Core go up and down completely randomly.
Pair Corralation between IShares Canadian and Mackenzie Core
Assuming the 90 days trading horizon iShares Canadian Universe is expected to generate 1.19 times more return on investment than Mackenzie Core. However, IShares Canadian is 1.19 times more volatile than Mackenzie Core Plus. It trades about 0.1 of its potential returns per unit of risk. Mackenzie Core Plus is currently generating about 0.06 per unit of risk. If you would invest 2,806 in iShares Canadian Universe on August 29, 2024 and sell it today you would earn a total of 26.00 from holding iShares Canadian Universe or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian Universe vs. Mackenzie Core Plus
Performance |
| Timeline |
| iShares Canadian Universe |
| Mackenzie Core Plus |
IShares Canadian and Mackenzie Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Mackenzie Core
The main advantage of trading using opposite IShares Canadian and Mackenzie Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian position performs unexpectedly, Mackenzie Core 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 Core will offset losses from the drop in Mackenzie Core's long position.| IShares Canadian vs. iShares Canadian Short | IShares Canadian vs. iShares MSCI EAFE | IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. iShares Canadian Real |
| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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