Correlation Between IShares Core and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core SP and Mackenzie Large Cap, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of Mackenzie Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Mackenzie Large.
Diversification Opportunities for IShares Core 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 Core SP 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 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 SP 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 Core i.e., IShares Core and Mackenzie Large go up and down completely randomly.
Pair Corralation between IShares Core and Mackenzie Large
Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.89 times more return on investment than Mackenzie Large. However, iShares Core SP is 1.12 times less risky than Mackenzie Large. It trades about 0.39 of its potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.31 per unit of risk. If you would invest 5,861 in iShares Core SP on September 4, 2024 and sell it today you would earn a total of 452.00 from holding iShares Core SP or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Core SP vs. Mackenzie Large Cap
Performance |
| Timeline |
| iShares Core SP |
| Mackenzie Large Cap |
IShares Core and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Mackenzie Large
The main advantage of trading using opposite IShares Core and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. Franklin Bissett Corporate | IShares Core vs. FT AlphaDEX Industrials | IShares Core vs. Dynamic Active Dividend | IShares Core vs. BMO Aggregate Bond |
| Mackenzie Large vs. Mackenzie Developed ex North | Mackenzie Large vs. Mackenzie Global Sustainable | Mackenzie Large vs. Mackenzie Aggregate Bond | Mackenzie Large vs. Mackenzie Canadian Ultra |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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