Correlation Between Blockchain Technologies and Mackenzie Balanced

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

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

Diversification Opportunities for Blockchain Technologies and Mackenzie Balanced

0.91

Correlation Coefficient

Blockchain Technologies  Mackenzie Balanced

Almost no diversification

The 3 months correlation between Blockchain and Mackenzie is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Technologies ETF and Mackenzie Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Balanced and Blockchain Technologies 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 Blockchain Technologies ETF are associated (or correlated) with Mackenzie Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Balanced has no effect on the direction of Blockchain Technologies i.e., Blockchain Technologies and Mackenzie Balanced go up and down completely randomly.

Pair Corralation between Blockchain Technologies and Mackenzie Balanced

Assuming the 90 days trading horizon Blockchain Technologies ETF is expected to generate 6.98 times more return on investment than Mackenzie Balanced. However, Blockchain Technologies is 6.98 times more volatile than Mackenzie Balanced Allocation. It trades about 0.18 of its potential returns per unit of risk. Mackenzie Balanced Allocation is currently generating about 0.18 per unit of risk. If you would invest  1,521  in Blockchain Technologies ETF on September 17, 2024 and sell it today you would earn a total of  583.00  from holding Blockchain Technologies ETF or generate 38.33% return on investment over 90 days.

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

Blockchain Technologies ETF  vs.  Mackenzie Balanced Allocation

Blockchain Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Technologies ETF are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Blockchain Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Mackenzie Balanced

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Balanced Allocation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Balanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blockchain Technologies and Mackenzie Balanced

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

The idea behind Blockchain Technologies ETF and Mackenzie Balanced Allocation 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.