Correlation Between Mackenzie Large and Mackenzie Global
Can any of the company-specific risk be diversified away by investing in both Mackenzie Large and Mackenzie Global 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 Mackenzie Large and Mackenzie Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Large Cap and Mackenzie Global Sustainable, you can compare the effects of market volatilities on Mackenzie Large and Mackenzie Global 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 Mackenzie Large with a short position of Mackenzie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Large and Mackenzie Global.
Diversification Opportunities for Mackenzie Large and Mackenzie Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mackenzie and Mackenzie is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Large Cap and Mackenzie Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Sus and Mackenzie Large 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 Mackenzie Large Cap are associated (or correlated) with Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Sus has no effect on the direction of Mackenzie Large i.e., Mackenzie Large and Mackenzie Global go up and down completely randomly.
Pair Corralation between Mackenzie Large and Mackenzie Global
Assuming the 90 days trading horizon Mackenzie Large Cap is expected to generate 1.03 times more return on investment than Mackenzie Global. However, Mackenzie Large is 1.03 times more volatile than Mackenzie Global Sustainable. It trades about 0.3 of its potential returns per unit of risk. Mackenzie Global Sustainable is currently generating about 0.21 per unit of risk. If you would invest 18,816 in Mackenzie Large Cap on September 5, 2024 and sell it today you would earn a total of 1,222 from holding Mackenzie Large Cap or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Large Cap vs. Mackenzie Global Sustainable
Performance |
| Timeline |
| Mackenzie Large Cap |
| Mackenzie Global Sus |
Mackenzie Large and Mackenzie Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Large and Mackenzie Global
The main advantage of trading using opposite Mackenzie Large and Mackenzie Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Large position performs unexpectedly, Mackenzie Global 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 Global will offset losses from the drop in Mackenzie Global's long position.| Mackenzie Large vs. Mackenzie Developed ex North | Mackenzie Large vs. Mackenzie Global Sustainable | Mackenzie Large vs. Mackenzie Aggregate Bond | Mackenzie Large vs. Mackenzie Canadian Ultra |
| Mackenzie Global vs. Mackenzie Developed ex North | Mackenzie Global vs. Mackenzie Aggregate Bond | Mackenzie Global vs. Mackenzie Canadian Ultra | Mackenzie Global vs. Mackenzie TIPS Index |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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