Correlation Between Mackenzie Core and IA Clarington
Can any of the company-specific risk be diversified away by investing in both Mackenzie Core 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 Core 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 Core Plus and IA Clarington Core, you can compare the effects of market volatilities on Mackenzie Core 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 Core with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and IA Clarington.
Diversification Opportunities for Mackenzie Core and IA Clarington
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mackenzie and ICPB is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus 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 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 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 Core i.e., Mackenzie Core and IA Clarington go up and down completely randomly.
Pair Corralation between Mackenzie Core and IA Clarington
Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.15 times less return on investment than IA Clarington. In addition to that, Mackenzie Core is 1.42 times more volatile than IA Clarington Core. It trades about 0.2 of its total potential returns per unit of risk. IA Clarington Core is currently generating about 0.33 per unit of volatility. If you would invest 939.00 in IA Clarington Core on September 1, 2024 and sell it today you would earn a total of 20.00 from holding IA Clarington Core or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mackenzie Core Plus vs. IA Clarington Core
Performance |
| Timeline |
| Mackenzie Core Plus |
| IA Clarington Core |
Mackenzie Core and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Core and IA Clarington
The main advantage of trading using opposite Mackenzie Core and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core 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 Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Canadian Aggregate |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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