Correlation Between PIMCO Canadian and Mackenzie Ivy

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

By analyzing existing cross correlation between PIMCO Canadian Core and Mackenzie Ivy European, you can compare the effects of market volatilities on PIMCO Canadian and Mackenzie Ivy 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 PIMCO Canadian with a short position of Mackenzie Ivy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Canadian and Mackenzie Ivy.

Diversification Opportunities for PIMCO Canadian and Mackenzie Ivy

0.31

Correlation Coefficient

PIMCO Canadian  Mackenzie Ivy

Weak diversification

The 3 months correlation between PIMCO and Mackenzie is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Canadian Core and Mackenzie Ivy European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Ivy European and PIMCO Canadian 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 PIMCO Canadian Core are associated (or correlated) with Mackenzie Ivy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Ivy European has no effect on the direction of PIMCO Canadian i.e., PIMCO Canadian and Mackenzie Ivy go up and down completely randomly.

Pair Corralation between PIMCO Canadian and Mackenzie Ivy

Assuming the 90 days trading horizon PIMCO Canadian Core is expected to generate 0.54 times more return on investment than Mackenzie Ivy. However, PIMCO Canadian Core is 1.84 times less risky than Mackenzie Ivy. It trades about 0.0 of its potential returns per unit of risk. Mackenzie Ivy European is currently generating about -0.01 per unit of risk. If you would invest  2,037  in PIMCO Canadian Core on September 14, 2024 and sell it today you would lose (3.00) from holding PIMCO Canadian Core or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

PIMCO Canadian Core  vs.  Mackenzie Ivy European

PIMCO Canadian Core

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mackenzie Ivy European

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PIMCO Canadian and Mackenzie Ivy

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

The idea behind PIMCO Canadian Core and Mackenzie Ivy European 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.