Correlation Between Mackenzie Canadian and BMO High

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

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

Diversification Opportunities for Mackenzie Canadian and BMO High

0.77

Correlation Coefficient

Mackenzie Canadian  BMO High

Poor diversification

The 3 months correlation between Mackenzie and BMO is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Large and BMO High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO High Yield and Mackenzie Canadian 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 Canadian Large are associated (or correlated) with BMO High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO High Yield has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and BMO High go up and down completely randomly.

Pair Corralation between Mackenzie Canadian and BMO High

Assuming the 90 days trading horizon Mackenzie Canadian Large is expected to generate 0.69 times more return on investment than BMO High. However, Mackenzie Canadian Large is 1.46 times less risky than BMO High. It trades about 0.44 of its potential returns per unit of risk. BMO High Yield is currently generating about 0.05 per unit of risk. If you would invest  14,897  in Mackenzie Canadian Large on April 25, 2025 and sell it today you would earn a total of  1,613  from holding Mackenzie Canadian Large or generate 10.83% return on investment over 90 days.

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

Mackenzie Canadian Large  vs.  BMO High Yield

Mackenzie Canadian Large

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Large are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Mackenzie Canadian may actually be approaching a critical reversion point that can send shares even higher in August 2025.

BMO High Yield

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BMO High Yield are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, BMO High is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mackenzie Canadian and BMO High

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

The idea behind Mackenzie Canadian Large and BMO High Yield 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.