Correlation Between Mackenzie Ivy and CDSPI Canadian

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

By analyzing existing cross correlation between Mackenzie Ivy European and CDSPI Canadian Equity, you can compare the effects of market volatilities on Mackenzie Ivy and CDSPI 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 Ivy with a short position of CDSPI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Ivy and CDSPI Canadian.

Diversification Opportunities for Mackenzie Ivy and CDSPI Canadian

0.62

Correlation Coefficient

Mackenzie Ivy  CDSPI Canadian

Poor diversification

The 3 months correlation between Mackenzie and CDSPI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Ivy European and CDSPI Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI Canadian Equity and Mackenzie Ivy 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 Ivy European are associated (or correlated) with CDSPI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI Canadian Equity has no effect on the direction of Mackenzie Ivy i.e., Mackenzie Ivy and CDSPI Canadian go up and down completely randomly.

Pair Corralation between Mackenzie Ivy and CDSPI Canadian

Assuming the 90 days trading horizon Mackenzie Ivy is expected to generate 3.45 times less return on investment than CDSPI Canadian. But when comparing it to its historical volatility, Mackenzie Ivy European is 1.24 times less risky than CDSPI Canadian. It trades about 0.08 of its potential returns per unit of risk. CDSPI Canadian Equity is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  4,511  in CDSPI Canadian Equity on April 25, 2025 and sell it today you would earn a total of  419.00  from holding CDSPI Canadian Equity or generate 9.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Mackenzie Ivy European  vs.  CDSPI Canadian Equity

Mackenzie Ivy European

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Ivy European are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Mackenzie Ivy is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CDSPI Canadian Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CDSPI Canadian Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CDSPI Canadian may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Mackenzie Ivy and CDSPI Canadian

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

The idea behind Mackenzie Ivy European and CDSPI Canadian Equity 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.