Correlation Between Accelerate Absolute and Mackenzie Developed
Can any of the company-specific risk be diversified away by investing in both Accelerate Absolute and Mackenzie Developed 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 Accelerate Absolute and Mackenzie Developed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accelerate Absolute Return and Mackenzie Developed ex North, you can compare the effects of market volatilities on Accelerate Absolute and Mackenzie Developed 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 Accelerate Absolute with a short position of Mackenzie Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accelerate Absolute and Mackenzie Developed.
Diversification Opportunities for Accelerate Absolute and Mackenzie Developed
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Accelerate and Mackenzie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Accelerate Absolute Return and Mackenzie Developed ex North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Developed and Accelerate Absolute 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 Accelerate Absolute Return are associated (or correlated) with Mackenzie Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Developed has no effect on the direction of Accelerate Absolute i.e., Accelerate Absolute and Mackenzie Developed go up and down completely randomly.
Pair Corralation between Accelerate Absolute and Mackenzie Developed
Assuming the 90 days trading horizon Accelerate Absolute Return is expected to generate 2.4 times more return on investment than Mackenzie Developed. However, Accelerate Absolute is 2.4 times more volatile than Mackenzie Developed ex North. It trades about 0.07 of its potential returns per unit of risk. Mackenzie Developed ex North is currently generating about 0.04 per unit of risk. If you would invest 2,142 in Accelerate Absolute Return on September 1, 2024 and sell it today you would earn a total of 681.00 from holding Accelerate Absolute Return or generate 31.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accelerate Absolute Return vs. Mackenzie Developed ex North
Performance |
| Timeline |
| Accelerate Absolute |
| Mackenzie Developed |
Accelerate Absolute and Mackenzie Developed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accelerate Absolute and Mackenzie Developed
The main advantage of trading using opposite Accelerate Absolute and Mackenzie Developed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accelerate Absolute position performs unexpectedly, Mackenzie Developed 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 Developed will offset losses from the drop in Mackenzie Developed's long position.| Accelerate Absolute vs. Accelerate Arbitrage | Accelerate Absolute vs. Accelerate OneChoice Alternative | Accelerate Absolute vs. NBI High Yield | Accelerate Absolute vs. NBI Unconstrained Fixed |
| Mackenzie Developed vs. Mackenzie Global Sustainable | Mackenzie Developed vs. Mackenzie Aggregate Bond | Mackenzie Developed vs. Mackenzie Canadian Ultra | Mackenzie Developed vs. Mackenzie TIPS Index |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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