Correlation Between Mackenzie Core and CIBC Active
Can any of the company-specific risk be diversified away by investing in both Mackenzie Core and CIBC Active 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 Core and CIBC Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Core Plus and CIBC Active Investment, you can compare the effects of market volatilities on Mackenzie Core and CIBC Active 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 Core with a short position of CIBC Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and CIBC Active.
Diversification Opportunities for Mackenzie Core and CIBC Active
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mackenzie and CIBC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and CIBC Active Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Active Investment and Mackenzie Core 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 Core Plus are associated (or correlated) with CIBC Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Active Investment has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and CIBC Active go up and down completely randomly.
Pair Corralation between Mackenzie Core and CIBC Active
Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.75 times less return on investment than CIBC Active. In addition to that, Mackenzie Core is 2.94 times more volatile than CIBC Active Investment. It trades about 0.04 of its total potential returns per unit of risk. CIBC Active Investment is currently generating about 0.22 per unit of volatility. If you would invest 1,984 in CIBC Active Investment on August 29, 2024 and sell it today you would earn a total of 11.00 from holding CIBC Active Investment or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Core Plus vs. CIBC Active Investment
Performance |
| Timeline |
| Mackenzie Core Plus |
| CIBC Active Investment |
Mackenzie Core and CIBC Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Core and CIBC Active
The main advantage of trading using opposite Mackenzie Core and CIBC Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core position performs unexpectedly, CIBC Active 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 Active will offset losses from the drop in CIBC Active's long position.The idea behind Mackenzie Core Plus and CIBC Active Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CIBC Active vs. Mackenzie Canadian Aggregate | CIBC Active vs. Mackenzie Core Plus | CIBC Active vs. Mackenzie Investment Grade | CIBC Active vs. Mackenzie Core Plus |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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