Correlation Between IShares SPTSX and Mackenzie Global
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Mackenzie Global 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 SPTSX and Mackenzie Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Mackenzie Global Infrastructure, you can compare the effects of market volatilities on IShares SPTSX and Mackenzie Global 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 SPTSX with a short position of Mackenzie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Mackenzie Global.
Diversification Opportunities for IShares SPTSX and Mackenzie Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Mackenzie is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Mackenzie Global Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Inf and IShares SPTSX 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 SPTSX Capped are associated (or correlated) with Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Inf has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Mackenzie Global go up and down completely randomly.
Pair Corralation between IShares SPTSX and Mackenzie Global
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 2.16 times more return on investment than Mackenzie Global. However, IShares SPTSX is 2.16 times more volatile than Mackenzie Global Infrastructure. It trades about 0.51 of its potential returns per unit of risk. Mackenzie Global Infrastructure is currently generating about 0.24 per unit of risk. If you would invest 5,800 in iShares SPTSX Capped on September 1, 2024 and sell it today you would earn a total of 1,231 from holding iShares SPTSX Capped or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Mackenzie Global Infrastructur
Performance |
| Timeline |
| iShares SPTSX Capped |
| Mackenzie Global Inf |
IShares SPTSX and Mackenzie Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Mackenzie Global
The main advantage of trading using opposite IShares SPTSX and Mackenzie Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Mackenzie Global 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 Global will offset losses from the drop in Mackenzie Global's long position.| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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