Correlation Between Bloom Select and Mackenzie All

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

By analyzing existing cross correlation between Bloom Select Income and Mackenzie All Cap, you can compare the effects of market volatilities on Bloom Select and Mackenzie All 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 Bloom Select with a short position of Mackenzie All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Select and Mackenzie All.

Diversification Opportunities for Bloom Select and Mackenzie All

-0.02

Correlation Coefficient

Bloom Select  Mackenzie All

Good diversification

The 3 months correlation between Bloom and Mackenzie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income and Mackenzie All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie All Cap and Bloom Select 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 Bloom Select Income are associated (or correlated) with Mackenzie All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie All Cap has no effect on the direction of Bloom Select i.e., Bloom Select and Mackenzie All go up and down completely randomly.

Pair Corralation between Bloom Select and Mackenzie All

Assuming the 90 days trading horizon Bloom Select is expected to generate 3.12 times less return on investment than Mackenzie All. In addition to that, Bloom Select is 1.37 times more volatile than Mackenzie All Cap. It trades about 0.05 of its total potential returns per unit of risk. Mackenzie All Cap is currently generating about 0.23 per unit of volatility. If you would invest  5,313  in Mackenzie All Cap on September 13, 2024 and sell it today you would earn a total of  791.00  from holding Mackenzie All Cap or generate 14.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Bloom Select Income  vs.  Mackenzie All Cap

Bloom Select Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Select Income are ranked lower than 4 (%) 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.

Mackenzie All Cap

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie All Cap are ranked lower than 17 (%) 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.

Pair Trading with Bloom Select and Mackenzie All

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

The idea behind Bloom Select Income and Mackenzie All Cap 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.