Correlation Between Mackenzie International and CI Global
Can any of the company-specific risk be diversified away by investing in both Mackenzie International and CI 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 International and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mackenzie International Equity and CI Global Financial, you can compare the effects of market volatilities on Mackenzie International and CI 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 International with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie International and CI Global.
Diversification Opportunities for Mackenzie International and CI Global
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mackenzie and FSF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie International Equity and CI Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Financial and Mackenzie International 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 International Equity are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Financial has no effect on the direction of Mackenzie International i.e., Mackenzie International and CI Global go up and down completely randomly.
Pair Corralation between Mackenzie International and CI Global
Assuming the 90 days trading horizon Mackenzie International Equity is expected to under-perform the CI Global. But the etf apears to be less risky and, when comparing its historical volatility, Mackenzie International Equity is 1.23 times less risky than CI Global. The etf trades about -0.15 of its potential returns per unit of risk. The CI Global Financial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,906 in CI Global Financial on August 25, 2024 and sell it today you would earn a total of 147.00 from holding CI Global Financial or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mackenzie International Equity vs. CI Global Financial
Performance |
| Timeline |
| Mackenzie International |
| CI Global Financial |
Mackenzie International and CI Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mackenzie International and CI Global
The main advantage of trading using opposite Mackenzie International and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie International position performs unexpectedly, CI 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 CI Global will offset losses from the drop in CI Global's long position.The idea behind Mackenzie International Equity and CI Global Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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