Correlation Between Mackenzie Core and Global X

Can any of the company-specific risk be diversified away by investing in both Mackenzie Core 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 Core 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 Core Plus and Global X 7 10, you can compare the effects of market volatilities on Mackenzie Core 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 Core with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mackenzie Core and Global X.

Diversification Opportunities for Mackenzie Core and Global X

0.72

Correlation Coefficient

Mackenzie Core  Global X

Poor diversification

The 3 months correlation between Mackenzie and Global is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and Global X 7 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 7 and Mackenzie Core 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 Core Plus 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 7 has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and Global X go up and down completely randomly.

Pair Corralation between Mackenzie Core and Global X

Assuming the 90 days trading horizon Mackenzie Core is expected to generate 1.73 times less return on investment than Global X. But when comparing it to its historical volatility, Mackenzie Core Plus is 1.06 times less risky than Global X. It trades about 0.17 of its potential returns per unit of risk. Global X 7 10 is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5,774  in Global X 7 10 on September 5, 2024 and sell it today you would earn a total of  119.00  from holding Global X 7 10 or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Mackenzie Core Plus  vs.  Global X 7 10

Mackenzie Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global X 7

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X 7 10 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Global X 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 Core and Global X

The main advantage of trading using opposite Mackenzie Core and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mackenzie Core 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.

The idea behind Mackenzie Core Plus and Global X 7 10 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.