Correlation Between Mackenzie Floating and RBC Discount
Can any of the company-specific risk be diversified away by investing in both Mackenzie Floating and RBC Discount 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 RBC Discount 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 RBC Discount Bond, you can compare the effects of market volatilities on Mackenzie Floating and RBC Discount 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 RBC Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Floating and RBC Discount.
Diversification Opportunities for Mackenzie Floating and RBC Discount
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mackenzie and RBC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Floating Rate and RBC Discount Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Discount Bond 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 RBC Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Discount Bond has no effect on the direction of Mackenzie Floating i.e., Mackenzie Floating and RBC Discount go up and down completely randomly.
Pair Corralation between Mackenzie Floating and RBC Discount
Assuming the 90 days trading horizon Mackenzie Floating Rate is expected to under-perform the RBC Discount. But the etf apears to be less risky and, when comparing its historical volatility, Mackenzie Floating Rate is 1.21 times less risky than RBC Discount. The etf trades about -0.01 of its potential returns per unit of risk. The RBC Discount Bond is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,117 in RBC Discount Bond on September 5, 2024 and sell it today you would earn a total of 38.00 from holding RBC Discount Bond or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Floating Rate vs. RBC Discount Bond
Performance |
| Timeline |
| Mackenzie Floating Rate |
| RBC Discount Bond |
Mackenzie Floating and RBC Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Floating and RBC Discount
The main advantage of trading using opposite Mackenzie Floating and RBC Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Floating position performs unexpectedly, RBC Discount 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 RBC Discount will offset losses from the drop in RBC Discount's long position.| Mackenzie Floating vs. Mackenzie Developed ex North | Mackenzie Floating vs. Mackenzie Global Sustainable | Mackenzie Floating vs. Mackenzie Aggregate Bond | Mackenzie Floating vs. Mackenzie Canadian Ultra |
| RBC Discount vs. Mackenzie Core Plus | RBC Discount vs. Mackenzie Floating Rate | RBC Discount vs. Mackenzie Unconstrained Bond | RBC Discount 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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