Correlation Between IA Clarington and Mackenzie Floating

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

By analyzing existing cross correlation between IA Clarington Strategic and Mackenzie Floating Rate, you can compare the effects of market volatilities on IA Clarington and Mackenzie Floating 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 IA Clarington with a short position of Mackenzie Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Mackenzie Floating.

Diversification Opportunities for IA Clarington and Mackenzie Floating

0.89

Correlation Coefficient

IA Clarington  Mackenzie Floating

Very poor diversification

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

Pair Corralation between IA Clarington and Mackenzie Floating

Assuming the 90 days trading horizon IA Clarington Strategic is expected to generate 2.9 times more return on investment than Mackenzie Floating. However, IA Clarington is 2.9 times more volatile than Mackenzie Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.19 per unit of risk. If you would invest  1,067  in IA Clarington Strategic on September 14, 2024 and sell it today you would earn a total of  152.00  from holding IA Clarington Strategic or generate 14.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

IA Clarington Strategic  vs.  Mackenzie Floating Rate

IA Clarington Strategic

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IA Clarington Strategic are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IA Clarington is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Floating Rate

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Floating Rate are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Floating is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IA Clarington and Mackenzie Floating

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

The idea behind IA Clarington Strategic and Mackenzie Floating Rate 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.