Correlation Between CI Enhanced and Mackenzie Aggregate
Can any of the company-specific risk be diversified away by investing in both CI Enhanced and Mackenzie Aggregate 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 Enhanced and Mackenzie Aggregate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Enhanced Government and Mackenzie Aggregate Bond, you can compare the effects of market volatilities on CI Enhanced and Mackenzie Aggregate 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 Enhanced with a short position of Mackenzie Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Enhanced and Mackenzie Aggregate.
Diversification Opportunities for CI Enhanced and Mackenzie Aggregate
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FGO and Mackenzie is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CI Enhanced Government and Mackenzie Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Aggregate Bond and CI Enhanced 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 Enhanced Government are associated (or correlated) with Mackenzie Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Aggregate Bond has no effect on the direction of CI Enhanced i.e., CI Enhanced and Mackenzie Aggregate go up and down completely randomly.
Pair Corralation between CI Enhanced and Mackenzie Aggregate
Assuming the 90 days trading horizon CI Enhanced Government is expected to generate 0.85 times more return on investment than Mackenzie Aggregate. However, CI Enhanced Government is 1.18 times less risky than Mackenzie Aggregate. It trades about 0.03 of its potential returns per unit of risk. Mackenzie Aggregate Bond is currently generating about 0.01 per unit of risk. If you would invest 1,004 in CI Enhanced Government on August 29, 2024 and sell it today you would earn a total of 2.00 from holding CI Enhanced Government or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Enhanced Government vs. Mackenzie Aggregate Bond
Performance |
| Timeline |
| CI Enhanced Government |
| Mackenzie Aggregate Bond |
CI Enhanced and Mackenzie Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Enhanced and Mackenzie Aggregate
The main advantage of trading using opposite CI Enhanced and Mackenzie Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Enhanced position performs unexpectedly, Mackenzie Aggregate 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 Aggregate will offset losses from the drop in Mackenzie Aggregate's long position.The idea behind CI Enhanced Government and Mackenzie Aggregate Bond 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.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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