Correlation Between Mackenzie Developed and Accelerate Arbitrage
Can any of the company-specific risk be diversified away by investing in both Mackenzie Developed and Accelerate Arbitrage 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 Developed and Accelerate Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Developed ex North and Accelerate Arbitrage, you can compare the effects of market volatilities on Mackenzie Developed and Accelerate Arbitrage 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 Developed with a short position of Accelerate Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Developed and Accelerate Arbitrage.
Diversification Opportunities for Mackenzie Developed and Accelerate Arbitrage
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mackenzie and Accelerate is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Developed ex North and Accelerate Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Arbitrage and Mackenzie Developed 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 Developed ex North are associated (or correlated) with Accelerate Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Arbitrage has no effect on the direction of Mackenzie Developed i.e., Mackenzie Developed and Accelerate Arbitrage go up and down completely randomly.
Pair Corralation between Mackenzie Developed and Accelerate Arbitrage
Assuming the 90 days trading horizon Mackenzie Developed ex North is expected to generate 0.55 times more return on investment than Accelerate Arbitrage. However, Mackenzie Developed ex North is 1.83 times less risky than Accelerate Arbitrage. It trades about 0.23 of its potential returns per unit of risk. Accelerate Arbitrage is currently generating about 0.02 per unit of risk. If you would invest 8,858 in Mackenzie Developed ex North on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Mackenzie Developed ex North or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Developed ex North vs. Accelerate Arbitrage
Performance |
| Timeline |
| Mackenzie Developed |
| Accelerate Arbitrage |
Mackenzie Developed and Accelerate Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Developed and Accelerate Arbitrage
The main advantage of trading using opposite Mackenzie Developed and Accelerate Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Developed position performs unexpectedly, Accelerate Arbitrage 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 Accelerate Arbitrage will offset losses from the drop in Accelerate Arbitrage's long position.| Mackenzie Developed vs. Mackenzie Global Sustainable | Mackenzie Developed vs. Mackenzie Aggregate Bond | Mackenzie Developed vs. Mackenzie Canadian Ultra | Mackenzie Developed vs. Mackenzie TIPS Index |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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