Correlation Between Mackenzie Floating and IA Clarington
Can any of the company-specific risk be diversified away by investing in both Mackenzie Floating and IA Clarington 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 Floating and IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Floating Rate and IA Clarington Core, you can compare the effects of market volatilities on Mackenzie Floating and IA Clarington 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 Floating with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Floating and IA Clarington.
Diversification Opportunities for Mackenzie Floating and IA Clarington
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mackenzie and ICPB is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Floating Rate and IA Clarington Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Core and Mackenzie Floating 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 Floating Rate are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Core has no effect on the direction of Mackenzie Floating i.e., Mackenzie Floating and IA Clarington go up and down completely randomly.
Pair Corralation between Mackenzie Floating and IA Clarington
Assuming the 90 days trading horizon Mackenzie Floating Rate is expected to generate 0.79 times more return on investment than IA Clarington. However, Mackenzie Floating Rate is 1.26 times less risky than IA Clarington. It trades about 0.16 of its potential returns per unit of risk. IA Clarington Core is currently generating about 0.07 per unit of risk. If you would invest 1,410 in Mackenzie Floating Rate on September 14, 2024 and sell it today you would earn a total of 310.00 from holding Mackenzie Floating Rate or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Floating Rate vs. IA Clarington Core
Performance |
| Timeline |
| Mackenzie Floating Rate |
| IA Clarington Core |
Mackenzie Floating and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Floating and IA Clarington
The main advantage of trading using opposite Mackenzie Floating and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Floating position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.| Mackenzie Floating vs. IA Clarington Core | Mackenzie Floating vs. IA Clarington Loomis | Mackenzie Floating vs. IA Clarington Strategic | Mackenzie Floating vs. PIMCO Investment Grade |
| IA Clarington vs. IA Clarington Floating | IA Clarington vs. IA Clarington Loomis | IA Clarington vs. Global X Active | IA Clarington vs. IA Clarington Strategic |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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