Correlation Between Mackenzie Bluewater and Bloom Select

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

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

Diversification Opportunities for Mackenzie Bluewater and Bloom Select

-0.07

Correlation Coefficient

Mackenzie Bluewater  Bloom Select

Good diversification

The 3 months correlation between Mackenzie and Bloom is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Bluewater Canadian and Bloom Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Select Income and Mackenzie Bluewater 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 Bluewater Canadian are associated (or correlated) with Bloom Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Select Income has no effect on the direction of Mackenzie Bluewater i.e., Mackenzie Bluewater and Bloom Select go up and down completely randomly.

Pair Corralation between Mackenzie Bluewater and Bloom Select

Assuming the 90 days trading horizon Mackenzie Bluewater Canadian is expected to generate 0.19 times more return on investment than Bloom Select. However, Mackenzie Bluewater Canadian is 5.26 times less risky than Bloom Select. It trades about 0.06 of its potential returns per unit of risk. Bloom Select Income is currently generating about -0.03 per unit of risk. If you would invest  1,933  in Mackenzie Bluewater Canadian on September 14, 2024 and sell it today you would earn a total of  11.00  from holding Mackenzie Bluewater Canadian or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Mackenzie Bluewater Canadian  vs.  Bloom Select Income

Mackenzie Bluewater

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Bluewater Canadian are ranked lower than 12 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Bloom Select Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Select Income are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental drivers, Bloom Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mackenzie Bluewater and Bloom Select

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

The idea behind Mackenzie Bluewater Canadian and Bloom Select Income 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 Global Correlations module to find global opportunities by holding instruments from different markets.