Correlation Between Mackenzie Canadian and FlexShares Real
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and FlexShares Real 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 FlexShares Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Equity and FlexShares Real Assets, you can compare the effects of market volatilities on Mackenzie Canadian and FlexShares Real 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 FlexShares Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and FlexShares Real.
Diversification Opportunities for Mackenzie Canadian and FlexShares Real
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mackenzie and FlexShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Equity and FlexShares Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Real Assets 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 Equity are associated (or correlated) with FlexShares Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Real Assets has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and FlexShares Real go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and FlexShares Real
Assuming the 90 days trading horizon Mackenzie Canadian Equity is expected to generate 0.88 times more return on investment than FlexShares Real. However, Mackenzie Canadian Equity is 1.14 times less risky than FlexShares Real. It trades about 0.07 of its potential returns per unit of risk. FlexShares Real Assets is currently generating about -0.03 per unit of risk. If you would invest 14,865 in Mackenzie Canadian Equity on November 27, 2024 and sell it today you would earn a total of 498.00 from holding Mackenzie Canadian Equity or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Mackenzie Canadian Equity vs. FlexShares Real Assets
Performance |
| Timeline |
| Mackenzie Canadian Equity |
| FlexShares Real Assets |
Mackenzie Canadian and FlexShares Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and FlexShares Real
The main advantage of trading using opposite Mackenzie Canadian and FlexShares Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, FlexShares Real 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 FlexShares Real will offset losses from the drop in FlexShares Real's long position.| Mackenzie Canadian vs. Mackenzie Large Cap | Mackenzie Canadian vs. Goldman Sachs ActiveBeta | Mackenzie Canadian vs. BMO MSCI EAFE | Mackenzie Canadian vs. BMO Long Federal |
| FlexShares Real vs. WisdomTree Interest Rate | FlexShares Real vs. First Trust Developed | FlexShares Real vs. VictoryShares International Volatility |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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