Correlation Between IShares Core and Mackenzie Core
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core Canadian and Mackenzie Core Plus, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of Mackenzie Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Mackenzie Core.
Diversification Opportunities for IShares Core and Mackenzie Core
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Mackenzie is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Canadian 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 Core 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 Core Canadian 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 Core i.e., IShares Core and Mackenzie Core go up and down completely randomly.
Pair Corralation between IShares Core and Mackenzie Core
Assuming the 90 days trading horizon IShares Core is expected to generate 1.25 times less return on investment than Mackenzie Core. But when comparing it to its historical volatility, iShares Core Canadian is 2.11 times less risky than Mackenzie Core. It trades about 0.24 of its potential returns per unit of risk. Mackenzie Core Plus is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,833 in Mackenzie Core Plus on September 3, 2024 and sell it today you would earn a total of 126.00 from holding Mackenzie Core Plus or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Canadian vs. Mackenzie Core Plus
Performance |
| Timeline |
| iShares Core Canadian |
| Mackenzie Core Plus |
IShares Core and Mackenzie Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Mackenzie Core
The main advantage of trading using opposite IShares Core and Mackenzie Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. BMO Short Federal | IShares Core vs. BMO Short Corporate | IShares Core vs. BMO Mid Corporate | IShares Core vs. BMO Long Corporate |
| Mackenzie Core vs. BMO Short Corporate | Mackenzie Core vs. BMO High Yield | Mackenzie Core vs. iShares Core Canadian | Mackenzie Core vs. Harvest Global REIT |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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