Correlation Between TD Canadian and Mackenzie Balanced

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

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

Diversification Opportunities for TD Canadian and Mackenzie Balanced

-0.63

Correlation Coefficient

TD Canadian  Mackenzie Balanced

Excellent diversification

The 3 months correlation between TCLB and Mackenzie is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Long and Mackenzie Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Balanced and TD 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 TD Canadian Long 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 TD Canadian i.e., TD Canadian and Mackenzie Balanced go up and down completely randomly.

Pair Corralation between TD Canadian and Mackenzie Balanced

Assuming the 90 days trading horizon TD Canadian Long is expected to under-perform the Mackenzie Balanced. In addition to that, TD Canadian is 1.39 times more volatile than Mackenzie Balanced Allocation. It trades about -0.08 of its total potential returns per unit of risk. Mackenzie Balanced Allocation is currently generating about 0.32 per unit of volatility. If you would invest  2,394  in Mackenzie Balanced Allocation on April 21, 2025 and sell it today you would earn a total of  243.00  from holding Mackenzie Balanced Allocation or generate 10.15% return on investment over 90 days.

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

TD Canadian Long  vs.  Mackenzie Balanced Allocation

TD Canadian Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Canadian Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TD Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Balanced Allocation are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mackenzie Balanced may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TD Canadian and Mackenzie Balanced

The main advantage of trading using opposite TD Canadian and Mackenzie Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Canadian 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 TD Canadian Long 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.