Correlation Between PHN Multi and Mackenzie Floating

Can any of the company-specific risk be diversified away by investing in both PHN Multi and Mackenzie Floating 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 PHN Multi and Mackenzie Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PHN Multi Style All Cap and Mackenzie Floating Rate, you can compare the effects of market volatilities on PHN Multi and Mackenzie Floating 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 PHN Multi with a short position of Mackenzie Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Multi and Mackenzie Floating.

Diversification Opportunities for PHN Multi and Mackenzie Floating

0.45

Correlation Coefficient

PHN Multi  Mackenzie Floating

Very weak diversification

The 3 months correlation between PHN and Mackenzie is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PHN Multi Style All Cap and Mackenzie Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Floating Rate and PHN Multi 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 PHN Multi Style All Cap are associated (or correlated) with Mackenzie Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Floating Rate has no effect on the direction of PHN Multi i.e., PHN Multi and Mackenzie Floating go up and down completely randomly.

Pair Corralation between PHN Multi and Mackenzie Floating

Assuming the 90 days trading horizon PHN Multi Style All Cap is expected to generate 4.92 times more return on investment than Mackenzie Floating. However, PHN Multi is 4.92 times more volatile than Mackenzie Floating Rate. It trades about 0.07 of its potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.18 per unit of risk. If you would invest  2,143  in PHN Multi Style All Cap on October 5, 2024 and sell it today you would earn a total of  436.00  from holding PHN Multi Style All Cap or generate 20.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.68%
Values	Daily Returns

PHN Multi Style All Cap  vs.  Mackenzie Floating Rate

PHN Multi Style

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHN Multi Style All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, PHN Multi is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Floating Rate

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Floating Rate are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Floating is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PHN Multi and Mackenzie Floating

The main advantage of trading using opposite PHN Multi and Mackenzie Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHN Multi position performs unexpectedly, Mackenzie Floating 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 Floating will offset losses from the drop in Mackenzie Floating's long position.

The idea behind PHN Multi Style All Cap and Mackenzie Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.