Correlation Between Guardian Canadian and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both Guardian Canadian 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 Guardian Canadian and Mackenzie Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Canadian Focused and Mackenzie Large Cap, you can compare the effects of market volatilities on Guardian Canadian 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 Guardian Canadian with a short position of Mackenzie Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Canadian and Mackenzie Large.
Diversification Opportunities for Guardian Canadian and Mackenzie Large
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guardian and Mackenzie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Canadian Focused 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 Guardian Canadian 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 Guardian Canadian Focused 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 Guardian Canadian i.e., Guardian Canadian and Mackenzie Large go up and down completely randomly.
Pair Corralation between Guardian Canadian and Mackenzie Large
Assuming the 90 days trading horizon Guardian Canadian is expected to generate 1.19 times less return on investment than Mackenzie Large. But when comparing it to its historical volatility, Guardian Canadian Focused is 1.25 times less risky than Mackenzie Large. It trades about 0.29 of its potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 20,615 in Mackenzie Large Cap on September 5, 2024 and sell it today you would earn a total of 3,986 from holding Mackenzie Large Cap or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Canadian Focused vs. Mackenzie Large Cap
Performance |
| Timeline |
| Guardian Canadian Focused |
| Mackenzie Large Cap |
Guardian Canadian and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Canadian and Mackenzie Large
The main advantage of trading using opposite Guardian Canadian and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Canadian 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.| Guardian Canadian vs. Mackenzie Large Cap | Guardian Canadian vs. Goldman Sachs ActiveBeta | Guardian Canadian vs. BMO MSCI EAFE | Guardian Canadian vs. BMO Long Federal |
| Mackenzie Large vs. Franklin Bissett Corporate | Mackenzie Large vs. FT AlphaDEX Industrials | Mackenzie Large vs. Dynamic Active Dividend | Mackenzie Large vs. BMO Aggregate Bond |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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