Correlation Between Mackenzie Canadian and BetaPro Gold
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and BetaPro Gold 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 Canadian and BetaPro Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Aggregate and BetaPro Gold Bullion, you can compare the effects of market volatilities on Mackenzie Canadian and BetaPro Gold 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 Canadian with a short position of BetaPro Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and BetaPro Gold.
Diversification Opportunities for Mackenzie Canadian and BetaPro Gold
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mackenzie and BetaPro is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Aggregate and BetaPro Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Gold Bullion and Mackenzie Canadian 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 Canadian Aggregate are associated (or correlated) with BetaPro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Gold Bullion has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and BetaPro Gold go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and BetaPro Gold
Assuming the 90 days trading horizon Mackenzie Canadian is expected to generate 238.95 times less return on investment than BetaPro Gold. But when comparing it to its historical volatility, Mackenzie Canadian Aggregate is 118.15 times less risky than BetaPro Gold. It trades about 0.08 of its potential returns per unit of risk. BetaPro Gold Bullion is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 651.00 in BetaPro Gold Bullion on September 3, 2024 and sell it today you would earn a total of 1,957 from holding BetaPro Gold Bullion or generate 300.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Aggregate vs. BetaPro Gold Bullion
Performance |
| Timeline |
| Mackenzie Canadian |
| BetaPro Gold Bullion |
Mackenzie Canadian and BetaPro Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and BetaPro Gold
The main advantage of trading using opposite Mackenzie Canadian and BetaPro Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, BetaPro Gold 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 BetaPro Gold will offset losses from the drop in BetaPro Gold's long position.| Mackenzie Canadian vs. BMO Short Corporate | Mackenzie Canadian vs. BMO High Yield | Mackenzie Canadian vs. iShares Core Canadian | Mackenzie Canadian vs. Harvest Global REIT |
| BetaPro Gold vs. BetaPro Gold Bullion | BetaPro Gold vs. BetaPro SP TSX | BetaPro Gold vs. BetaPro SPTSX Capped | BetaPro Gold vs. BetaPro Silver 2x |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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