Correlation Between IShares NASDAQ and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both IShares NASDAQ and Mackenzie Large 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 NASDAQ and Mackenzie Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares NASDAQ 100 and Mackenzie Large Cap, you can compare the effects of market volatilities on IShares NASDAQ and Mackenzie Large 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 NASDAQ with a short position of Mackenzie Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares NASDAQ and Mackenzie Large.
Diversification Opportunities for IShares NASDAQ and Mackenzie Large
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 NASDAQ 100 and Mackenzie Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Large Cap and IShares NASDAQ 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 NASDAQ 100 are associated (or correlated) with Mackenzie Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Large Cap has no effect on the direction of IShares NASDAQ i.e., IShares NASDAQ and Mackenzie Large go up and down completely randomly.
Pair Corralation between IShares NASDAQ and Mackenzie Large
Assuming the 90 days trading horizon IShares NASDAQ is expected to generate 1.14 times less return on investment than Mackenzie Large. In addition to that, IShares NASDAQ is 1.49 times more volatile than Mackenzie Large Cap. It trades about 0.11 of its total potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.19 per unit of volatility. If you would invest 16,888 in Mackenzie Large Cap on September 1, 2024 and sell it today you would earn a total of 7,549 from holding Mackenzie Large Cap or generate 44.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares NASDAQ 100 vs. Mackenzie Large Cap
Performance |
| Timeline |
| iShares NASDAQ 100 |
| Mackenzie Large Cap |
IShares NASDAQ and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares NASDAQ and Mackenzie Large
The main advantage of trading using opposite IShares NASDAQ and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares NASDAQ position performs unexpectedly, Mackenzie Large 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 Large will offset losses from the drop in Mackenzie Large's long position.| IShares NASDAQ vs. BMO SP 500 | IShares NASDAQ vs. Vanguard SP 500 | IShares NASDAQ vs. iShares Core SP | IShares NASDAQ vs. BMO SP 500 |
| Mackenzie Large vs. BMO SP 500 | Mackenzie Large vs. Vanguard SP 500 | Mackenzie Large vs. iShares Core SP | Mackenzie Large vs. BMO SP 500 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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