Correlation Between Mackenzie Core and Vanguard Canadian
Can any of the company-specific risk be diversified away by investing in both Mackenzie Core and Vanguard Canadian 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 Vanguard Canadian 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 Vanguard Canadian Aggregate, you can compare the effects of market volatilities on Mackenzie Core and Vanguard Canadian 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 Vanguard Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and Vanguard Canadian.
Diversification Opportunities for Mackenzie Core and Vanguard Canadian
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mackenzie and Vanguard is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and Vanguard Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Canadian 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 Vanguard Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Canadian has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and Vanguard Canadian go up and down completely randomly.
Pair Corralation between Mackenzie Core and Vanguard Canadian
Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.2 times less return on investment than Vanguard Canadian. But when comparing it to its historical volatility, Mackenzie Core Plus is 1.03 times less risky than Vanguard Canadian. It trades about 0.06 of its potential returns per unit of risk. Vanguard Canadian Aggregate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,128 in Vanguard Canadian Aggregate on August 31, 2024 and sell it today you would earn a total of 220.00 from holding Vanguard Canadian Aggregate or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Core Plus vs. Vanguard Canadian Aggregate
Performance |
| Timeline |
| Mackenzie Core Plus |
| Vanguard Canadian |
Mackenzie Core and Vanguard Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Core and Vanguard Canadian
The main advantage of trading using opposite Mackenzie Core and Vanguard Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core position performs unexpectedly, Vanguard Canadian 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 Vanguard Canadian will offset losses from the drop in Vanguard Canadian's long position.| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
| Vanguard Canadian vs. Vanguard Canadian Short | Vanguard Canadian vs. Vanguard FTSE Canada | Vanguard Canadian vs. Vanguard FTSE Global | Vanguard Canadian vs. Vanguard FTSE Emerging |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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