Correlation Between IShares Core and Mackenzie Conservative

Can any of the company-specific risk be diversified away by investing in both IShares Core and Mackenzie Conservative 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 Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core Conservative and Mackenzie Conservative Allocation, you can compare the effects of market volatilities on IShares Core and Mackenzie Conservative 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 Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Mackenzie Conservative.

Diversification Opportunities for IShares Core and Mackenzie Conservative

0.92

Correlation Coefficient

IShares Core  Mackenzie Conservative

Almost no diversification

The 3 months correlation between IShares and Mackenzie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Conservative and Mackenzie Conservative Allocat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Conservative 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 Conservative are associated (or correlated) with Mackenzie Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Conservative has no effect on the direction of IShares Core i.e., IShares Core and Mackenzie Conservative go up and down completely randomly.

Pair Corralation between IShares Core and Mackenzie Conservative

Assuming the 90 days trading horizon iShares Core Conservative is expected to generate 0.81 times more return on investment than Mackenzie Conservative. However, iShares Core Conservative is 1.24 times less risky than Mackenzie Conservative. It trades about 0.27 of its potential returns per unit of risk. Mackenzie Conservative Allocation is currently generating about 0.17 per unit of risk. If you would invest  2,277  in iShares Core Conservative on September 3, 2024 and sell it today you would earn a total of  114.00  from holding iShares Core Conservative or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

iShares Core Conservative  vs.  Mackenzie Conservative Allocat

iShares Core Conservative

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Conservative are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Conservative

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Conservative Allocation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Conservative is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Core and Mackenzie Conservative

The main advantage of trading using opposite IShares Core and Mackenzie Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Mackenzie Conservative 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 Conservative will offset losses from the drop in Mackenzie Conservative's long position.

The idea behind iShares Core Conservative and Mackenzie Conservative Allocation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.