Correlation Between Mackenzie Canadian and CIBC Core
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and CIBC Core 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 Canadian and CIBC Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Short and CIBC Core Fixed, you can compare the effects of market volatilities on Mackenzie Canadian and CIBC Core 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 Canadian with a short position of CIBC Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and CIBC Core.
Diversification Opportunities for Mackenzie Canadian and CIBC Core
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mackenzie and CIBC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Short and CIBC Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Core Fixed and Mackenzie Canadian 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 Canadian Short are associated (or correlated) with CIBC Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Core Fixed has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and CIBC Core go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and CIBC Core
Assuming the 90 days trading horizon Mackenzie Canadian is expected to generate 1.68 times less return on investment than CIBC Core. But when comparing it to its historical volatility, Mackenzie Canadian Short is 1.93 times less risky than CIBC Core. It trades about 0.14 of its potential returns per unit of risk. CIBC Core Fixed is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,783 in CIBC Core Fixed on September 1, 2024 and sell it today you would earn a total of 19.00 from holding CIBC Core Fixed or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mackenzie Canadian Short vs. CIBC Core Fixed
Performance |
| Timeline |
| Mackenzie Canadian Short |
| CIBC Core Fixed |
Mackenzie Canadian and CIBC Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and CIBC Core
The main advantage of trading using opposite Mackenzie Canadian and CIBC Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, CIBC Core 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 CIBC Core will offset losses from the drop in CIBC Core's long position.| Mackenzie Canadian vs. Vanguard Total Market | Mackenzie Canadian vs. iShares High Quality | Mackenzie Canadian vs. iShares 1 10Yr Laddered | Mackenzie Canadian vs. iShares Canadian HYBrid |
| CIBC Core vs. BetaPro Gold Bullion | CIBC Core vs. BetaPro SP TSX | CIBC Core vs. BetaPro SPTSX Capped | CIBC Core vs. Global X Active |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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