Correlation Between IShares Canadian and Mackenzie Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Canadian 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 Canadian 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 Canadian Short and Mackenzie Canadian Aggregate, you can compare the effects of market volatilities on IShares Canadian 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 Canadian with a short position of Mackenzie Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Mackenzie Canadian.
Diversification Opportunities for IShares Canadian and Mackenzie Canadian
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Mackenzie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian Short and Mackenzie Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian 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 Short 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 has no effect on the direction of IShares Canadian i.e., IShares Canadian and Mackenzie Canadian go up and down completely randomly.
Pair Corralation between IShares Canadian and Mackenzie Canadian
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.54 times less return on investment than Mackenzie Canadian. But when comparing it to its historical volatility, iShares Canadian Short is 2.54 times less risky than Mackenzie Canadian. It trades about 0.22 of its potential returns per unit of risk. Mackenzie Canadian Aggregate is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,871 in Mackenzie Canadian Aggregate on August 29, 2024 and sell it today you would earn a total of 526.00 from holding Mackenzie Canadian Aggregate or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian Short vs. Mackenzie Canadian Aggregate
Performance |
| Timeline |
| iShares Canadian Short |
| Mackenzie Canadian |
IShares Canadian and Mackenzie Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Mackenzie Canadian
The main advantage of trading using opposite IShares Canadian and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian 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 Canadian vs. iShares Core Canadian | IShares Canadian vs. BMO Short Corporate | IShares Canadian vs. Vanguard Canadian Short | IShares Canadian vs. BMO Ultra Short Term |
| Mackenzie Canadian vs. BMO Aggregate Bond | Mackenzie Canadian vs. iShares Canadian Universe | Mackenzie Canadian vs. BMO Core Plus | Mackenzie Canadian vs. BMO Discount 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |