Correlation Between IA Clarington and Mackenzie Growth
Can any of the company-specific risk be diversified away by investing in both IA Clarington and Mackenzie Growth 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 Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA Clarington Loomis and Mackenzie Growth Allocation, you can compare the effects of market volatilities on IA Clarington and Mackenzie Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Mackenzie Growth.
Diversification Opportunities for IA Clarington and Mackenzie Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IGAF and Mackenzie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Loomis and Mackenzie Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Growth All 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 Loomis are associated (or correlated) with Mackenzie Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Growth All has no effect on the direction of IA Clarington i.e., IA Clarington and Mackenzie Growth go up and down completely randomly.
Pair Corralation between IA Clarington and Mackenzie Growth
Assuming the 90 days trading horizon IA Clarington is expected to generate 1.21 times less return on investment than Mackenzie Growth. In addition to that, IA Clarington is 1.15 times more volatile than Mackenzie Growth Allocation. It trades about 0.14 of its total potential returns per unit of risk. Mackenzie Growth Allocation is currently generating about 0.2 per unit of volatility. If you would invest 2,842 in Mackenzie Growth Allocation on August 29, 2024 and sell it today you would earn a total of 73.00 from holding Mackenzie Growth Allocation or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IA Clarington Loomis vs. Mackenzie Growth Allocation
Performance |
| Timeline |
| IA Clarington Loomis |
| Mackenzie Growth All |
IA Clarington and Mackenzie Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and Mackenzie Growth
The main advantage of trading using opposite IA Clarington and Mackenzie Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington position performs unexpectedly, Mackenzie Growth 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 Growth will offset losses from the drop in Mackenzie Growth's long position.| IA Clarington vs. IA Clarington Core | IA Clarington vs. IA Clarington Floating | IA Clarington vs. IA Clarington Strategic | IA Clarington vs. Purpose Global Bond |
| Mackenzie Growth vs. Mackenzie Developed ex North | Mackenzie Growth vs. Mackenzie Global Sustainable | Mackenzie Growth vs. Mackenzie Aggregate Bond | Mackenzie Growth vs. Mackenzie Canadian Ultra |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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