Correlation Between Mackenzie Bluewater and Mackenzie All

Can any of the company-specific risk be diversified away by investing in both Mackenzie Bluewater and Mackenzie All 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 Mackenzie All 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 Mackenzie All Cap, you can compare the effects of market volatilities on Mackenzie Bluewater and Mackenzie All 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 Mackenzie All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Bluewater and Mackenzie All.

Diversification Opportunities for Mackenzie Bluewater and Mackenzie All

0.97

Correlation Coefficient

Mackenzie Bluewater  Mackenzie All

Almost no diversification

The 3 months correlation between Mackenzie and Mackenzie is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Bluewater Canadian and Mackenzie All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie All Cap 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 Mackenzie All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie All Cap has no effect on the direction of Mackenzie Bluewater i.e., Mackenzie Bluewater and Mackenzie All go up and down completely randomly.

Pair Corralation between Mackenzie Bluewater and Mackenzie All

Assuming the 90 days trading horizon Mackenzie Bluewater is expected to generate 3.2 times less return on investment than Mackenzie All. But when comparing it to its historical volatility, Mackenzie Bluewater Canadian is 1.82 times less risky than Mackenzie All. It trades about 0.16 of its potential returns per unit of risk. Mackenzie All Cap is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  5,295  in Mackenzie All Cap on September 14, 2024 and sell it today you would earn a total of  918.00  from holding Mackenzie All Cap or generate 17.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mackenzie Bluewater Canadian  vs.  Mackenzie All Cap

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.

Mackenzie All Cap

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie All Cap are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Mackenzie All sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mackenzie Bluewater and Mackenzie All

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

The idea behind Mackenzie Bluewater Canadian and Mackenzie All Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.