Correlation Between Mackenzie Growth and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both Mackenzie Growth and Vanguard Growth 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 Growth and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Growth Allocation and Vanguard Growth Portfolio, you can compare the effects of market volatilities on Mackenzie Growth and Vanguard Growth 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 Growth with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Growth and Vanguard Growth.
Diversification Opportunities for Mackenzie Growth and Vanguard Growth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mackenzie and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Growth Allocation and Vanguard Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Portfolio and Mackenzie Growth 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 Growth Allocation are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Portfolio has no effect on the direction of Mackenzie Growth i.e., Mackenzie Growth and Vanguard Growth go up and down completely randomly.
Pair Corralation between Mackenzie Growth and Vanguard Growth
Assuming the 90 days trading horizon Mackenzie Growth Allocation is expected to generate 1.11 times more return on investment than Vanguard Growth. However, Mackenzie Growth is 1.11 times more volatile than Vanguard Growth Portfolio. It trades about 0.13 of its potential returns per unit of risk. Vanguard Growth Portfolio is currently generating about 0.14 per unit of risk. If you would invest 2,207 in Mackenzie Growth Allocation on August 29, 2024 and sell it today you would earn a total of 708.00 from holding Mackenzie Growth Allocation or generate 32.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Growth Allocation vs. Vanguard Growth Portfolio
Performance |
| Timeline |
| Mackenzie Growth All |
| Vanguard Growth Portfolio |
Mackenzie Growth and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Growth and Vanguard Growth
The main advantage of trading using opposite Mackenzie Growth and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Growth position performs unexpectedly, Vanguard Growth 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 Growth will offset losses from the drop in Vanguard Growth's long position.| Mackenzie Growth vs. Mackenzie Developed ex North | Mackenzie Growth vs. Mackenzie Global Sustainable | Mackenzie Growth vs. Mackenzie Aggregate Bond | Mackenzie Growth vs. Mackenzie Canadian Ultra |
| Vanguard Growth vs. IA Clarington Core | Vanguard Growth vs. IA Clarington Floating | Vanguard Growth vs. IA Clarington Strategic | Vanguard Growth vs. Purpose Global Bond |
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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