Correlation Between Fidelity Tactical and Mackenzie Bluewater

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

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

Diversification Opportunities for Fidelity Tactical and Mackenzie Bluewater

0.67

Correlation Coefficient

Fidelity Tactical  Mackenzie Bluewater

Poor diversification

The 3 months correlation between Fidelity and Mackenzie is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Tactical High and Mackenzie Bluewater Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Bluewater and Fidelity Tactical 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 Fidelity Tactical High are associated (or correlated) with Mackenzie Bluewater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Bluewater has no effect on the direction of Fidelity Tactical i.e., Fidelity Tactical and Mackenzie Bluewater go up and down completely randomly.

Pair Corralation between Fidelity Tactical and Mackenzie Bluewater

Assuming the 90 days trading horizon Fidelity Tactical High is expected to under-perform the Mackenzie Bluewater. But the fund apears to be less risky and, when comparing its historical volatility, Fidelity Tactical High is 1.0 times less risky than Mackenzie Bluewater. The fund trades about -0.03 of its potential returns per unit of risk. The Mackenzie Bluewater Canadian is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,835  in Mackenzie Bluewater Canadian on December 30, 2024 and sell it today you would earn a total of  34.00  from holding Mackenzie Bluewater Canadian or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Fidelity Tactical High  vs.  Mackenzie Bluewater Canadian

Fidelity Tactical High

Risk-Adjusted Performance

Very Weak

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

Mackenzie Bluewater

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Bluewater Canadian are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, Mackenzie Bluewater is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Tactical and Mackenzie Bluewater

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

The idea behind Fidelity Tactical High and Mackenzie Bluewater Canadian 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.