Correlation Between Mackenzie All and Bloom Select

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

Diversification Opportunities for Mackenzie All and Bloom Select

-0.05

Correlation Coefficient

Mackenzie All  Bloom Select

Good diversification

The 3 months correlation between Mackenzie and Bloom is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie All Cap 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 All 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 All Cap 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 All i.e., Mackenzie All and Bloom Select go up and down completely randomly.

Pair Corralation between Mackenzie All and Bloom Select

Assuming the 90 days trading horizon Mackenzie All Cap is expected to generate 0.74 times more return on investment than Bloom Select. However, Mackenzie All Cap is 1.36 times less risky than Bloom Select. It trades about 0.27 of its potential returns per unit of risk. Bloom Select Income is currently generating about 0.01 per unit of risk. 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 Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Mackenzie All Cap  vs.  Bloom Select Income

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.

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 All and Bloom Select

The main advantage of trading using opposite Mackenzie All and Bloom Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie All 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 All Cap 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.