Correlation Between Mackenzie Canadian and Global X
Can any of the company-specific risk be diversified away by investing in both Mackenzie Canadian and Global X 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 Canadian and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie Canadian Aggregate and Global X Active, you can compare the effects of market volatilities on Mackenzie Canadian and Global X 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 Canadian with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Canadian and Global X.
Diversification Opportunities for Mackenzie Canadian and Global X
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mackenzie and Global is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Aggregate and Global X Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Active and Mackenzie 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 Mackenzie Canadian Aggregate are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Active has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and Global X go up and down completely randomly.
Pair Corralation between Mackenzie Canadian and Global X
Assuming the 90 days trading horizon Mackenzie Canadian Aggregate is expected to generate 3.55 times more return on investment than Global X. However, Mackenzie Canadian is 3.55 times more volatile than Global X Active. It trades about 0.09 of its potential returns per unit of risk. Global X Active is currently generating about 0.12 per unit of risk. If you would invest 9,295 in Mackenzie Canadian Aggregate on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Mackenzie Canadian Aggregate or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Aggregate vs. Global X Active
Performance |
| Timeline |
| Mackenzie Canadian |
| Global X Active |
Mackenzie Canadian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie Canadian and Global X
The main advantage of trading using opposite Mackenzie Canadian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Canadian position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Mackenzie Canadian vs. Mackenzie Core Plus | Mackenzie Canadian vs. Mackenzie Unconstrained Bond | Mackenzie Canadian vs. Mackenzie Floating Rate | Mackenzie Canadian vs. Mackenzie Canadian Short |
| Global X vs. Global X Equal | Global X vs. Global X Enhanced | Global X vs. Global X Gold | Global X vs. Global X Canadian |
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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