Correlation Between CI Short and Mackenzie Core
Can any of the company-specific risk be diversified away by investing in both CI Short 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 CI Short and Mackenzie Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Short Term and Mackenzie Core Plus, you can compare the effects of market volatilities on CI Short 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 CI Short with a short position of Mackenzie Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Short and Mackenzie Core.
Diversification Opportunities for CI Short and Mackenzie Core
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FGB and Mackenzie is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CI Short Term 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 CI Short 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 CI Short Term 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 CI Short i.e., CI Short and Mackenzie Core go up and down completely randomly.
Pair Corralation between CI Short and Mackenzie Core
Assuming the 90 days trading horizon CI Short is expected to generate 1.58 times less return on investment than Mackenzie Core. But when comparing it to its historical volatility, CI Short Term is 2.34 times less risky than Mackenzie Core. It trades about 0.14 of its potential returns per unit of risk. Mackenzie Core Plus is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,568 in Mackenzie Core Plus on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Mackenzie Core Plus or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Short Term vs. Mackenzie Core Plus
Performance |
| Timeline |
| CI Short Term |
| Mackenzie Core Plus |
CI Short and Mackenzie Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Short and Mackenzie Core
The main advantage of trading using opposite CI Short and Mackenzie Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Short 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.| CI Short vs. BMO Short Federal | CI Short vs. BMO Short Corporate | CI Short vs. BMO Mid Corporate | CI Short vs. BMO Long Corporate |
| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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