Correlation Between Mackenzie Core and Mackenzie Canadian

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

Diversification Opportunities for Mackenzie Core and Mackenzie Canadian

0.34

Correlation Coefficient

Mackenzie Core  Mackenzie Canadian

Weak diversification

The 3 months correlation between Mackenzie and Mackenzie is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and Mackenzie Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian and Mackenzie Core 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 Core Plus 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 has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and Mackenzie Canadian go up and down completely randomly.

Pair Corralation between Mackenzie Core and Mackenzie Canadian

Assuming the 90 days trading horizon Mackenzie Core Plus is expected to under-perform the Mackenzie Canadian. But the etf apears to be less risky and, when comparing its historical volatility, Mackenzie Core Plus is 1.06 times less risky than Mackenzie Canadian. The etf trades about -0.04 of its potential returns per unit of risk. The Mackenzie Canadian Aggregate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9,265  in Mackenzie Canadian Aggregate on October 11, 2024 and sell it today you would earn a total of  67.00  from holding Mackenzie Canadian Aggregate or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Mackenzie Core Plus  vs.  Mackenzie Canadian Aggregate

Mackenzie Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mackenzie Core Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Mackenzie Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Canadian

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Aggregate are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Mackenzie Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mackenzie Core and Mackenzie Canadian

The main advantage of trading using opposite Mackenzie Core and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core 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 Core Plus and Mackenzie Canadian Aggregate 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.