Correlation Between Mackenzie Large and CIBC Canadian
Can any of the company-specific risk be diversified away by investing in both Mackenzie Large and CIBC 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 Large and CIBC Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Large Cap and CIBC Canadian Equity, you can compare the effects of market volatilities on Mackenzie Large and CIBC 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 Large with a short position of CIBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Large and CIBC Canadian.
Diversification Opportunities for Mackenzie Large and CIBC Canadian
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mackenzie and CIBC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Large Cap and CIBC Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Canadian Equity and Mackenzie Large 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 Large Cap are associated (or correlated) with CIBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Canadian Equity has no effect on the direction of Mackenzie Large i.e., Mackenzie Large and CIBC Canadian go up and down completely randomly.
Pair Corralation between Mackenzie Large and CIBC Canadian
Assuming the 90 days trading horizon Mackenzie Large Cap is expected to generate 1.2 times more return on investment than CIBC Canadian. However, Mackenzie Large is 1.2 times more volatile than CIBC Canadian Equity. It trades about 0.01 of its potential returns per unit of risk. CIBC Canadian Equity is currently generating about 0.01 per unit of risk. If you would invest 24,462 in Mackenzie Large Cap on December 2, 2024 and sell it today you would earn a total of 125.00 from holding Mackenzie Large Cap or generate 0.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mackenzie Large Cap vs. CIBC Canadian Equity
Performance |
Timeline |
Mackenzie Large Cap |
CIBC Canadian Equity |
Mackenzie Large and CIBC Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mackenzie Large and CIBC Canadian
The main advantage of trading using opposite Mackenzie Large and CIBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Large position performs unexpectedly, CIBC 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 CIBC Canadian will offset losses from the drop in CIBC Canadian's long position.Mackenzie Large vs. Mackenzie Canadian Equity | Mackenzie Large vs. BMO MSCI EAFE | Mackenzie Large vs. Goldman Sachs ActiveBeta | Mackenzie Large vs. BMO Long Federal |
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Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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