Correlation Between Mackenzie Balanced and First Trust
Can any of the company-specific risk be diversified away by investing in both Mackenzie Balanced and First Trust 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 Mackenzie Balanced and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Balanced Allocation and First Trust Canadian, you can compare the effects of market volatilities on Mackenzie Balanced and First Trust 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 Mackenzie Balanced with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Balanced and First Trust.
Diversification Opportunities for Mackenzie Balanced and First Trust
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mackenzie and First is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Balanced Allocation and First Trust Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Canadian and Mackenzie Balanced 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 Mackenzie Balanced Allocation are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Canadian has no effect on the direction of Mackenzie Balanced i.e., Mackenzie Balanced and First Trust go up and down completely randomly.
Pair Corralation between Mackenzie Balanced and First Trust
Assuming the 90 days trading horizon Mackenzie Balanced is expected to generate 1.58 times less return on investment than First Trust. But when comparing it to its historical volatility, Mackenzie Balanced Allocation is 1.41 times less risky than First Trust. It trades about 0.1 of its potential returns per unit of risk. First Trust Canadian is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,852 in First Trust Canadian on October 24, 2025 and sell it today you would earn a total of 2,563 from holding First Trust Canadian or generate 52.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Mackenzie Balanced Allocation vs. First Trust Canadian
Performance |
| Timeline |
| Mackenzie Balanced |
| First Trust Canadian |
Mackenzie Balanced and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Balanced and First Trust
The main advantage of trading using opposite Mackenzie Balanced and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Balanced position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Mackenzie Balanced vs. Mackenzie Developed ex North | Mackenzie Balanced vs. Mackenzie Aggregate Bond | Mackenzie Balanced vs. Mackenzie Canadian Ultra | Mackenzie Balanced vs. Mackenzie TIPS Index |
| First Trust vs. iShares ESG Equity | First Trust vs. iShares MSCI Min | First Trust vs. Invesco RAFI Canadian | First Trust vs. Desjardins RI Developed |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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