Correlation Between Visa and Mackenzie Core
Can any of the company-specific risk be diversified away by investing in both Visa and Mackenzie Core 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 Visa and Mackenzie Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Mackenzie Core Plus, you can compare the effects of market volatilities on Visa and Mackenzie Core 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 Visa with a short position of Mackenzie Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mackenzie Core.
Diversification Opportunities for Visa and Mackenzie Core
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Mackenzie is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mackenzie Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Core Plus and Visa 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 Visa Class A are associated (or correlated) with Mackenzie Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Core Plus has no effect on the direction of Visa i.e., Visa and Mackenzie Core go up and down completely randomly.
Pair Corralation between Visa and Mackenzie Core
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.86 times more return on investment than Mackenzie Core. However, Visa is 2.86 times more volatile than Mackenzie Core Plus. It trades about 0.09 of its potential returns per unit of risk. Mackenzie Core Plus is currently generating about 0.06 per unit of risk. If you would invest 27,484 in Visa Class A on November 5, 2024 and sell it today you would earn a total of 6,696 from holding Visa Class A or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Mackenzie Core Plus
Performance |
| Timeline |
| Visa Class A |
| Mackenzie Core Plus |
Visa and Mackenzie Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Mackenzie Core
The main advantage of trading using opposite Visa and Mackenzie Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Mackenzie Core 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 Core will offset losses from the drop in Mackenzie Core's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Upstart Holdings | Visa vs. Capital One Financial |
| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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