Correlation Between Global X and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both Global X and Mackenzie Large 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 Large 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 Large Cap, you can compare the effects of market volatilities on Global X and Mackenzie Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Mackenzie Large.
Diversification Opportunities for Global X and Mackenzie Large
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Mackenzie is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Global X SPTSX and Mackenzie Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Large Cap has no effect on the direction of Global X i.e., Global X and Mackenzie Large go up and down completely randomly.
Pair Corralation between Global X and Mackenzie Large
Assuming the 90 days trading horizon Global X SPTSX is expected to generate 0.68 times more return on investment than Mackenzie Large. However, Global X SPTSX is 1.47 times less risky than Mackenzie Large. It trades about 0.36 of its potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.22 per unit of risk. If you would invest 6,443 in Global X SPTSX on September 12, 2024 and sell it today you would earn a total of 206.00 from holding Global X SPTSX or generate 3.2% 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 Large Cap
Performance |
| Timeline |
| Global X SPTSX |
| Mackenzie Large Cap |
Global X and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Mackenzie Large
The main advantage of trading using opposite Global X and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Mackenzie Large 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 Large will offset losses from the drop in Mackenzie Large'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 Large vs. Mackenzie Canadian Equity | Mackenzie Large vs. BMO MSCI EAFE | Mackenzie Large vs. Goldman Sachs ActiveBeta | Mackenzie Large vs. BMO Long Federal |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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