Correlation Between Mackenzie Large and Guardian Canadian
Can any of the company-specific risk be diversified away by investing in both Mackenzie Large and Guardian Canadian 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 Large and Guardian Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Large Cap and Guardian Canadian Focused, you can compare the effects of market volatilities on Mackenzie Large and Guardian Canadian 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 Large with a short position of Guardian Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Large and Guardian Canadian.
Diversification Opportunities for Mackenzie Large and Guardian Canadian
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mackenzie and Guardian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Large Cap and Guardian Canadian Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Canadian Focused and Mackenzie Large 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 Large Cap are associated (or correlated) with Guardian Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Canadian Focused has no effect on the direction of Mackenzie Large i.e., Mackenzie Large and Guardian Canadian go up and down completely randomly.
Pair Corralation between Mackenzie Large and Guardian Canadian
Assuming the 90 days trading horizon Mackenzie Large Cap is expected to generate 1.06 times more return on investment than Guardian Canadian. However, Mackenzie Large is 1.06 times more volatile than Guardian Canadian Focused. It trades about 0.33 of its potential returns per unit of risk. Guardian Canadian Focused is currently generating about 0.32 per unit of risk. If you would invest 21,243 in Mackenzie Large Cap on September 5, 2024 and sell it today you would earn a total of 3,511 from holding Mackenzie Large Cap or generate 16.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Large Cap vs. Guardian Canadian Focused
Performance |
| Timeline |
| Mackenzie Large Cap |
| Guardian Canadian Focused |
Mackenzie Large and Guardian Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Large and Guardian Canadian
The main advantage of trading using opposite Mackenzie Large and Guardian Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Large position performs unexpectedly, Guardian Canadian 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 Guardian Canadian will offset losses from the drop in Guardian Canadian's long position.| Mackenzie Large vs. Franklin Bissett Corporate | Mackenzie Large vs. FT AlphaDEX Industrials | Mackenzie Large vs. BMO Aggregate Bond | Mackenzie Large vs. iShares Canadian HYBrid |
| Guardian Canadian vs. Mackenzie Large Cap | Guardian Canadian vs. Goldman Sachs ActiveBeta | Guardian Canadian vs. BMO MSCI EAFE | Guardian Canadian vs. BMO Long Federal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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