Correlation Between TD Canadian and Mackenzie Emerging
Can any of the company-specific risk be diversified away by investing in both TD Canadian and Mackenzie Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on TD Canadian and Mackenzie Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Canadian and Mackenzie Emerging.
Diversification Opportunities for TD Canadian and Mackenzie Emerging
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TCLB and Mackenzie is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Long and Mackenzie Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Emerging 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Emerging has no effect on the direction of TD Canadian i.e., TD Canadian and Mackenzie Emerging go up and down completely randomly.
Pair Corralation between TD Canadian and Mackenzie Emerging
Assuming the 90 days trading horizon TD Canadian Long is expected to under-perform the Mackenzie Emerging. In addition to that, TD Canadian is 1.34 times more volatile than Mackenzie Emerging Markets. It trades about -0.08 of its total potential returns per unit of risk. Mackenzie Emerging Markets is currently generating about 0.12 per unit of volatility. If you would invest 7,560 in Mackenzie Emerging Markets on April 21, 2025 and sell it today you would earn a total of 278.00 from holding Mackenzie Emerging Markets or generate 3.68% 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 Emerging Markets
Performance |
Timeline |
TD Canadian Long |
Mackenzie Emerging |
TD Canadian and Mackenzie Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TD Canadian and Mackenzie Emerging
The main advantage of trading using opposite TD Canadian and Mackenzie Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Canadian position performs unexpectedly, Mackenzie Emerging 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 Emerging will offset losses from the drop in Mackenzie Emerging's long position.TD Canadian vs. NBI High Yield | TD Canadian vs. NBI Unconstrained Fixed | TD Canadian vs. Mackenzie Developed ex North | TD Canadian vs. BMO Short Term Bond |
Mackenzie Emerging vs. iShares IG Corporate | Mackenzie Emerging vs. iShares 1 10Yr Laddered | Mackenzie Emerging vs. iShares Floating Rate | Mackenzie Emerging vs. iShares Convertible Bond |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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