Correlation Between Global X and Mackenzie Core
Can any of the company-specific risk be diversified away by investing in both Global X and Mackenzie Core 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 Global X and Mackenzie Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Canadian and Mackenzie Core Plus, you can compare the effects of market volatilities on Global X and Mackenzie Core 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 Global X with a short position of Mackenzie Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Mackenzie Core.
Diversification Opportunities for Global X and Mackenzie Core
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Mackenzie is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global X Canadian and Mackenzie Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Core Plus and Global X 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 Global X Canadian are associated (or correlated) with Mackenzie Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Core Plus has no effect on the direction of Global X i.e., Global X and Mackenzie Core go up and down completely randomly.
Pair Corralation between Global X and Mackenzie Core
Assuming the 90 days trading horizon Global X Canadian is expected to generate 1.44 times more return on investment than Mackenzie Core. However, Global X is 1.44 times more volatile than Mackenzie Core Plus. It trades about 0.17 of its potential returns per unit of risk. Mackenzie Core Plus is currently generating about 0.14 per unit of risk. If you would invest 4,863 in Global X Canadian on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Global X Canadian or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Canadian vs. Mackenzie Core Plus
Performance |
| Timeline |
| Global X Canadian |
| Mackenzie Core Plus |
Global X and Mackenzie Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Mackenzie Core
The main advantage of trading using opposite Global X and Mackenzie Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Mackenzie Core 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 Core will offset losses from the drop in Mackenzie Core's long position.| Global X vs. Global X Intl | Global X vs. Global X SP | Global X vs. BMO Discount Bond | Global X vs. Global X 7 10 |
| Mackenzie Core vs. Mackenzie Core Plus | Mackenzie Core vs. Mackenzie Floating Rate | Mackenzie Core vs. Mackenzie Unconstrained Bond | Mackenzie Core vs. Mackenzie Canadian Short |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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