Correlation Between IA Clarington and Mackenzie Floating
Can any of the company-specific risk be diversified away by investing in both IA Clarington 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 IA Clarington and Mackenzie Floating 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 Mackenzie Floating Rate, you can compare the effects of market volatilities on IA Clarington 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 IA Clarington with a short position of Mackenzie Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Mackenzie Floating.
Diversification Opportunities for IA Clarington and Mackenzie Floating
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICPB and Mackenzie is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Core 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 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 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 IA Clarington i.e., IA Clarington and Mackenzie Floating go up and down completely randomly.
Pair Corralation between IA Clarington and Mackenzie Floating
Assuming the 90 days trading horizon IA Clarington Core is expected to generate 2.45 times more return on investment than Mackenzie Floating. However, IA Clarington is 2.45 times more volatile than Mackenzie Floating Rate. It trades about 0.18 of its potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.43 per unit of risk. If you would invest 942.00 in IA Clarington Core on September 14, 2024 and sell it today you would earn a total of 12.00 from holding IA Clarington Core or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IA Clarington Core vs. Mackenzie Floating Rate
Performance |
| Timeline |
| IA Clarington Core |
| Mackenzie Floating Rate |
IA Clarington and Mackenzie Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and Mackenzie Floating
The main advantage of trading using opposite IA Clarington and Mackenzie Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington 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.| IA Clarington vs. IA Clarington Floating | IA Clarington vs. IA Clarington Loomis | IA Clarington vs. Global X Active | IA Clarington vs. IA Clarington Strategic |
| Mackenzie Floating vs. IA Clarington Core | Mackenzie Floating vs. IA Clarington Loomis | Mackenzie Floating vs. IA Clarington Strategic | Mackenzie Floating vs. PIMCO Investment Grade |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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