Correlation Between Mackenzie All and Mackenzie Canadian

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

Diversification Opportunities for Mackenzie All and Mackenzie Canadian

0.97

Correlation Coefficient

Mackenzie All  Mackenzie Canadian

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 All Cap and Mackenzie Canadian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian Growth 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 Mackenzie Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian Growth has no effect on the direction of Mackenzie All i.e., Mackenzie All and Mackenzie Canadian go up and down completely randomly.

Pair Corralation between Mackenzie All and Mackenzie Canadian

Assuming the 90 days trading horizon Mackenzie All Cap is expected to generate 1.82 times more return on investment than Mackenzie Canadian. However, Mackenzie All is 1.82 times more volatile than Mackenzie Canadian Growth. It trades about 0.27 of its potential returns per unit of risk. Mackenzie Canadian Growth is currently generating about 0.14 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 Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mackenzie All Cap  vs.  Mackenzie Canadian Growth

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.

Mackenzie Canadian Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, Mackenzie Canadian 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 Mackenzie Canadian

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

The idea behind Mackenzie All Cap and Mackenzie Canadian Growth 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.