Correlation Between Mackenzie Growth and Brompton Enhanced

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

By analyzing existing cross correlation between Mackenzie Growth Allocation and Brompton Enhanced Multi Asset, you can compare the effects of market volatilities on Mackenzie Growth and Brompton Enhanced 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 Growth with a short position of Brompton Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Growth and Brompton Enhanced.

Diversification Opportunities for Mackenzie Growth and Brompton Enhanced

0.89

Correlation Coefficient

Mackenzie Growth  Brompton Enhanced

Very poor diversification

The 3 months correlation between Mackenzie and Brompton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Growth Allocation and Brompton Enhanced Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Enhanced Multi and Mackenzie Growth 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 Growth Allocation are associated (or correlated) with Brompton Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Enhanced Multi has no effect on the direction of Mackenzie Growth i.e., Mackenzie Growth and Brompton Enhanced go up and down completely randomly.

Pair Corralation between Mackenzie Growth and Brompton Enhanced

Assuming the 90 days trading horizon Mackenzie Growth Allocation is expected to generate 0.76 times more return on investment than Brompton Enhanced. However, Mackenzie Growth Allocation is 1.31 times less risky than Brompton Enhanced. It trades about 0.0 of its potential returns per unit of risk. Brompton Enhanced Multi Asset is currently generating about -0.03 per unit of risk. If you would invest  2,932  in Mackenzie Growth Allocation on December 5, 2024 and sell it today you would lose (3.00) from holding Mackenzie Growth Allocation or give up 0.1% of portfolio value over 90 days.

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

Mackenzie Growth Allocation  vs.  Brompton Enhanced Multi Asset

Mackenzie Growth All

Risk-Adjusted Performance

Very Weak

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

Brompton Enhanced Multi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brompton Enhanced Multi Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Brompton Enhanced 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 Growth and Brompton Enhanced

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

The idea behind Mackenzie Growth Allocation and Brompton Enhanced Multi Asset 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 Stocks Directory module to find actively traded stocks across global markets.