Correlation Between Mackenzie Developed and Mackenzie Aggregate
Can any of the company-specific risk be diversified away by investing in both Mackenzie Developed and Mackenzie Aggregate 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 Mackenzie Aggregate 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 Mackenzie Aggregate Bond, you can compare the effects of market volatilities on Mackenzie Developed and Mackenzie Aggregate 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 Mackenzie Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Developed and Mackenzie Aggregate.
Diversification Opportunities for Mackenzie Developed and Mackenzie Aggregate
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mackenzie and Mackenzie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Developed ex North and Mackenzie Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Aggregate Bond 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 Mackenzie Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Aggregate Bond has no effect on the direction of Mackenzie Developed i.e., Mackenzie Developed and Mackenzie Aggregate go up and down completely randomly.
Pair Corralation between Mackenzie Developed and Mackenzie Aggregate
Assuming the 90 days trading horizon Mackenzie Developed ex North is expected to generate 1.33 times more return on investment than Mackenzie Aggregate. However, Mackenzie Developed is 1.33 times more volatile than Mackenzie Aggregate Bond. It trades about 0.0 of its potential returns per unit of risk. Mackenzie Aggregate Bond is currently generating about -0.16 per unit of risk. If you would invest 8,900 in Mackenzie Developed ex North on August 25, 2024 and sell it today you would lose (1.00) from holding Mackenzie Developed ex North or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Developed ex North vs. Mackenzie Aggregate Bond
Performance |
| Timeline |
| Mackenzie Developed |
| Mackenzie Aggregate Bond |
Mackenzie Developed and Mackenzie Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Developed and Mackenzie Aggregate
The main advantage of trading using opposite Mackenzie Developed and Mackenzie Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Developed position performs unexpectedly, Mackenzie Aggregate 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 Mackenzie Aggregate will offset losses from the drop in Mackenzie Aggregate'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 |
| Mackenzie Aggregate vs. Mackenzie Developed ex North | Mackenzie Aggregate vs. Mackenzie Global Sustainable | Mackenzie Aggregate vs. Mackenzie Canadian Ultra | Mackenzie Aggregate 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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