Correlation Between Bloom Select and Mackenzie Canadian

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

Diversification Opportunities for Bloom Select and Mackenzie Canadian

-0.05

Correlation Coefficient

Bloom Select  Mackenzie Canadian

Good diversification

The 3 months correlation between Bloom and Mackenzie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income 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 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 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 Bloom Select i.e., Bloom Select and Mackenzie Canadian go up and down completely randomly.

Pair Corralation between Bloom Select and Mackenzie Canadian

Assuming the 90 days trading horizon Bloom Select is expected to generate 1.35 times less return on investment than Mackenzie Canadian. In addition to that, Bloom Select is 2.56 times more volatile than Mackenzie Canadian Growth. It trades about 0.04 of its total potential returns per unit of risk. Mackenzie Canadian Growth is currently generating about 0.16 per unit of volatility. If you would invest  4,780  in Mackenzie Canadian Growth on September 12, 2024 and sell it today you would earn a total of  245.00  from holding Mackenzie Canadian Growth or generate 5.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Bloom Select Income  vs.  Mackenzie Canadian Growth

Bloom Select Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bloom Select Income are ranked lower than 3 (%) 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 Canadian Growth

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Growth are ranked lower than 12 (%) 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 Bloom Select and Mackenzie Canadian

The main advantage of trading using opposite Bloom Select and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Select 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 Bloom Select Income 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.