Correlation Between IShares SPTSX and Mackenzie Canadian
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Mackenzie Canadian 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 Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX 60 and Mackenzie Canadian Ultra, you can compare the effects of market volatilities on IShares SPTSX and Mackenzie Canadian 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 Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Mackenzie Canadian.
Diversification Opportunities for IShares SPTSX and Mackenzie Canadian
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Mackenzie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX 60 and Mackenzie Canadian Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian Ultra 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 60 are associated (or correlated) with Mackenzie Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian Ultra has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Mackenzie Canadian go up and down completely randomly.
Pair Corralation between IShares SPTSX and Mackenzie Canadian
Assuming the 90 days trading horizon iShares SPTSX 60 is expected to generate 32.36 times more return on investment than Mackenzie Canadian. However, IShares SPTSX is 32.36 times more volatile than Mackenzie Canadian Ultra. It trades about 0.3 of its potential returns per unit of risk. Mackenzie Canadian Ultra is currently generating about 0.82 per unit of risk. If you would invest 3,692 in iShares SPTSX 60 on August 25, 2024 and sell it today you would earn a total of 149.00 from holding iShares SPTSX 60 or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares SPTSX 60 vs. Mackenzie Canadian Ultra
Performance |
| Timeline |
| iShares SPTSX 60 |
| Mackenzie Canadian Ultra |
IShares SPTSX and Mackenzie Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Mackenzie Canadian
The main advantage of trading using opposite IShares SPTSX and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Mackenzie Canadian 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 Canadian will offset losses from the drop in Mackenzie Canadian's long position.| IShares SPTSX vs. iShares Core SP | IShares SPTSX vs. iShares Core SPTSX | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped |
| Mackenzie Canadian vs. iShares SPTSX 60 | Mackenzie Canadian vs. iShares Core SP | Mackenzie Canadian vs. iShares Core SPTSX | Mackenzie Canadian vs. BMO Aggregate Bond |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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