Correlation Between Mackenzie Global and CI Enhanced

Can any of the company-specific risk be diversified away by investing in both Mackenzie Global and CI Enhanced 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 Global and CI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mackenzie Global Fixed and CI Enhanced Short, you can compare the effects of market volatilities on Mackenzie Global and CI Enhanced 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 Global with a short position of CI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Global and CI Enhanced.

Diversification Opportunities for Mackenzie Global and CI Enhanced

0.53

Correlation Coefficient

Mackenzie Global  CI Enhanced

Very weak diversification

The 3 months correlation between Mackenzie and FSB is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Global Fixed and CI Enhanced Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Enhanced Short and Mackenzie Global 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 Global Fixed are associated (or correlated) with CI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Enhanced Short has no effect on the direction of Mackenzie Global i.e., Mackenzie Global and CI Enhanced go up and down completely randomly.

Pair Corralation between Mackenzie Global and CI Enhanced

Assuming the 90 days trading horizon Mackenzie Global Fixed is expected to generate 1.84 times more return on investment than CI Enhanced. However, Mackenzie Global is 1.84 times more volatile than CI Enhanced Short. It trades about -0.02 of its potential returns per unit of risk. CI Enhanced Short is currently generating about -0.04 per unit of risk. If you would invest  1,691  in Mackenzie Global Fixed on September 22, 2024 and sell it today you would lose (6.00) from holding Mackenzie Global Fixed or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mackenzie Global Fixed  vs.  CI Enhanced Short

Mackenzie Global Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mackenzie Global Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mackenzie Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Enhanced Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Enhanced Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, CI Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mackenzie Global and CI Enhanced

The main advantage of trading using opposite Mackenzie Global and CI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Global position performs unexpectedly, CI Enhanced 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 Enhanced will offset losses from the drop in CI Enhanced's long position.

The idea behind Mackenzie Global Fixed and CI Enhanced Short 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.