Correlation Between Global X and Mackenzie Canadian
Can any of the company-specific risk be diversified away by investing in both Global X and Mackenzie 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 Global X and Mackenzie Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SPTSX and Mackenzie Canadian Large, you can compare the effects of market volatilities on Global X and Mackenzie 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 Global X with a short position of Mackenzie Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Mackenzie Canadian.
Diversification Opportunities for Global X and Mackenzie Canadian
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Global and Mackenzie is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global X SPTSX and Mackenzie Canadian Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian Large 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 SPTSX are associated (or correlated) with Mackenzie Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian Large has no effect on the direction of Global X i.e., Global X and Mackenzie Canadian go up and down completely randomly.
Pair Corralation between Global X and Mackenzie Canadian
Assuming the 90 days trading horizon Global X is expected to generate 1.06 times less return on investment than Mackenzie Canadian. But when comparing it to its historical volatility, Global X SPTSX is 1.01 times less risky than Mackenzie Canadian. It trades about 0.08 of its potential returns per unit of risk. Mackenzie Canadian Large is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,707 in Mackenzie Canadian Large on November 5, 2024 and sell it today you would earn a total of 3,958 from holding Mackenzie Canadian Large or generate 33.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SPTSX vs. Mackenzie Canadian Large
Performance |
| Timeline |
| Global X SPTSX |
| Mackenzie Canadian Large |
Global X and Mackenzie Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Mackenzie Canadian
The main advantage of trading using opposite Global X and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Mackenzie 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 Mackenzie Canadian will offset losses from the drop in Mackenzie Canadian's long position.| Global X vs. Global X SP | Global X vs. BMO SPTSX Capped | Global X vs. Vanguard FTSE Canada | Global X vs. iShares Core SPTSX |
| Mackenzie Canadian vs. Mackenzie Large Cap | Mackenzie Canadian vs. Mackenzie International Equity | Mackenzie Canadian vs. Mackenzie Canadian Equity | Mackenzie Canadian vs. Mackenzie Canadian Aggregate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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