Correlation Between IA Clarington and Mackenzie Canadian
Can any of the company-specific risk be diversified away by investing in both IA Clarington and Mackenzie Canadian 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 Canadian 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 Canadian Aggregate, you can compare the effects of market volatilities on IA Clarington and Mackenzie Canadian 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 Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Mackenzie Canadian.
Diversification Opportunities for IA Clarington and Mackenzie Canadian
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICPB and Mackenzie is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Core and Mackenzie Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian 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 Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian has no effect on the direction of IA Clarington i.e., IA Clarington and Mackenzie Canadian go up and down completely randomly.
Pair Corralation between IA Clarington and Mackenzie Canadian
Assuming the 90 days trading horizon IA Clarington is expected to generate 2.14 times less return on investment than Mackenzie Canadian. But when comparing it to its historical volatility, IA Clarington Core is 1.42 times less risky than Mackenzie Canadian. It trades about 0.15 of its potential returns per unit of risk. Mackenzie Canadian Aggregate is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 9,372 in Mackenzie Canadian Aggregate on November 7, 2024 and sell it today you would earn a total of 171.00 from holding Mackenzie Canadian Aggregate or generate 1.82% 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. Mackenzie Canadian Aggregate
Performance |
| Timeline |
| IA Clarington Core |
| Mackenzie Canadian |
IA Clarington and Mackenzie Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and Mackenzie Canadian
The main advantage of trading using opposite IA Clarington and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington position performs unexpectedly, Mackenzie Canadian 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 Canadian will offset losses from the drop in Mackenzie Canadian'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 Canadian vs. BMO Aggregate Bond | Mackenzie Canadian vs. iShares Canadian Universe | Mackenzie Canadian vs. BMO Core Plus | Mackenzie Canadian vs. BMO Discount 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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