Correlation Between FT AlphaDEX and Mackenzie Floating
Can any of the company-specific risk be diversified away by investing in both FT AlphaDEX and Mackenzie Floating 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 FT AlphaDEX and Mackenzie Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT AlphaDEX Industrials and Mackenzie Floating Rate, you can compare the effects of market volatilities on FT AlphaDEX and Mackenzie Floating 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 FT AlphaDEX with a short position of Mackenzie Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT AlphaDEX and Mackenzie Floating.
Diversification Opportunities for FT AlphaDEX and Mackenzie Floating
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FHG and Mackenzie is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FT AlphaDEX Industrials and Mackenzie Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Floating Rate and FT AlphaDEX 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 FT AlphaDEX Industrials are associated (or correlated) with Mackenzie Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Floating Rate has no effect on the direction of FT AlphaDEX i.e., FT AlphaDEX and Mackenzie Floating go up and down completely randomly.
Pair Corralation between FT AlphaDEX and Mackenzie Floating
Assuming the 90 days trading horizon FT AlphaDEX Industrials is expected to generate 11.71 times more return on investment than Mackenzie Floating. However, FT AlphaDEX is 11.71 times more volatile than Mackenzie Floating Rate. It trades about 0.34 of its potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.53 per unit of risk. If you would invest 5,566 in FT AlphaDEX Industrials on August 29, 2024 and sell it today you would earn a total of 619.00 from holding FT AlphaDEX Industrials or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT AlphaDEX Industrials vs. Mackenzie Floating Rate
Performance |
| Timeline |
| FT AlphaDEX Industrials |
| Mackenzie Floating Rate |
FT AlphaDEX and Mackenzie Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT AlphaDEX and Mackenzie Floating
The main advantage of trading using opposite FT AlphaDEX and Mackenzie Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT AlphaDEX position performs unexpectedly, Mackenzie Floating 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 Floating will offset losses from the drop in Mackenzie Floating's long position.The idea behind FT AlphaDEX Industrials and Mackenzie Floating Rate 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.| Mackenzie Floating vs. First Trust Global | Mackenzie Floating vs. FT AlphaDEX Industrials | Mackenzie Floating vs. First Trust Value | Mackenzie Floating vs. Global X Active |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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