Correlation Between Mackenzie Canadian and Harvest Premium
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and Harvest Premium 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 Harvest Premium 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 Harvest Premium Yield, you can compare the effects of market volatilities on Mackenzie Canadian and Harvest Premium 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 Harvest Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and Harvest Premium.
Diversification Opportunities for Mackenzie Canadian and Harvest Premium
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mackenzie and Harvest is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Short and Harvest Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Premium Yield 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 Harvest Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Premium Yield has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and Harvest Premium go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and Harvest Premium
Assuming the 90 days trading horizon Mackenzie Canadian is expected to generate 2.99 times less return on investment than Harvest Premium. But when comparing it to its historical volatility, Mackenzie Canadian Short is 5.53 times less risky than Harvest Premium. It trades about 0.19 of its potential returns per unit of risk. Harvest Premium Yield is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Harvest Premium Yield on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Harvest Premium Yield or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Short vs. Harvest Premium Yield
Performance |
| Timeline |
| Mackenzie Canadian Short |
| Harvest Premium Yield |
Mackenzie Canadian and Harvest Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and Harvest Premium
The main advantage of trading using opposite Mackenzie Canadian and Harvest Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, Harvest Premium 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 Harvest Premium will offset losses from the drop in Harvest Premium's long position.| Mackenzie Canadian vs. Mackenzie Core Plus | Mackenzie Canadian vs. Mackenzie Core Plus | Mackenzie Canadian vs. Mackenzie Unconstrained Bond | Mackenzie Canadian vs. Mackenzie Canadian Aggregate |
| Harvest Premium vs. Mackenzie Core Plus | Harvest Premium vs. Mackenzie Floating Rate | Harvest Premium vs. Mackenzie Unconstrained Bond | Harvest Premium vs. Mackenzie Canadian Short |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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