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 Equity and Global X SPTSX, 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
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mackenzie and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Equity and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX 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 Equity 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 SPTSX 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 Equity is expected to generate 1.02 times more return on investment than Global X. However, Mackenzie Canadian is 1.02 times more volatile than Global X SPTSX. It trades about -0.05 of its potential returns per unit of risk. Global X SPTSX is currently generating about -0.06 per unit of risk. If you would invest 15,171 in Mackenzie Canadian Equity on January 20, 2025 and sell it today you would lose (408.00) from holding Mackenzie Canadian Equity or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mackenzie Canadian Equity vs. Global X SPTSX
Performance |
| Timeline |
| Mackenzie Canadian Equity |
| Global X SPTSX |
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 Large Cap | Mackenzie Canadian vs. Goldman Sachs ActiveBeta | Mackenzie Canadian vs. BMO MSCI EAFE | Mackenzie Canadian vs. BMO Long Federal |
| Global X vs. Global X SP | Global X vs. BMO SPTSX Capped | Global X vs. Vanguard FTSE Canada | Global X vs. iShares Core SPTSX |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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