Correlation Between IA Clarington and Purpose Global
Can any of the company-specific risk be diversified away by investing in both IA Clarington and Purpose Global 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 IA Clarington and Purpose Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA Clarington Core and Purpose Global Bond, you can compare the effects of market volatilities on IA Clarington and Purpose Global 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 IA Clarington with a short position of Purpose Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Purpose Global.
Diversification Opportunities for IA Clarington and Purpose Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICPB and Purpose is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Core and Purpose Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Global Bond and IA Clarington 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 IA Clarington Core are associated (or correlated) with Purpose Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Global Bond has no effect on the direction of IA Clarington i.e., IA Clarington and Purpose Global go up and down completely randomly.
Pair Corralation between IA Clarington and Purpose Global
Assuming the 90 days trading horizon IA Clarington is expected to generate 1.37 times less return on investment than Purpose Global. In addition to that, IA Clarington is 1.28 times more volatile than Purpose Global Bond. It trades about 0.09 of its total potential returns per unit of risk. Purpose Global Bond is currently generating about 0.16 per unit of volatility. If you would invest 1,671 in Purpose Global Bond on August 29, 2024 and sell it today you would earn a total of 171.00 from holding Purpose Global Bond or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IA Clarington Core vs. Purpose Global Bond
Performance |
| Timeline |
| IA Clarington Core |
| Purpose Global Bond |
IA Clarington and Purpose Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and Purpose Global
The main advantage of trading using opposite IA Clarington and Purpose Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington position performs unexpectedly, Purpose Global 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 Purpose Global will offset losses from the drop in Purpose Global's long position.| IA Clarington vs. Mackenzie Canadian Aggregate | IA Clarington vs. Mackenzie Core Plus | IA Clarington vs. Mackenzie Investment Grade | IA Clarington vs. Mackenzie Core Plus |
| Purpose Global vs. Purpose Total Return | Purpose Global vs. Purpose Multi Asset Income | Purpose Global vs. Purpose Strategic Yield | Purpose Global 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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