Correlation Between Mackenzie Canadian and Mackenzie Global

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

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

Diversification Opportunities for Mackenzie Canadian and Mackenzie Global

0.88

Correlation Coefficient

Mackenzie Canadian  Mackenzie Global

Very poor diversification

The 3 months correlation between Mackenzie and Mackenzie is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Canadian Ultra and Mackenzie Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Sus 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 Ultra are associated (or correlated) with Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Sus has no effect on the direction of Mackenzie Canadian i.e., Mackenzie Canadian and Mackenzie Global go up and down completely randomly.

Pair Corralation between Mackenzie Canadian and Mackenzie Global

Assuming the 90 days trading horizon Mackenzie Canadian is expected to generate 4.65 times less return on investment than Mackenzie Global. But when comparing it to its historical volatility, Mackenzie Canadian Ultra is 29.39 times less risky than Mackenzie Global. It trades about 0.73 of its potential returns per unit of risk. Mackenzie Global Sustainable is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,549  in Mackenzie Global Sustainable on September 14, 2024 and sell it today you would earn a total of  136.00  from holding Mackenzie Global Sustainable or generate 5.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Mackenzie Canadian Ultra  vs.  Mackenzie Global Sustainable

Mackenzie Canadian Ultra

Risk-Adjusted Performance

57 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Ultra are ranked lower than 57 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mackenzie Global Sus

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Global Sustainable are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Mackenzie Canadian and Mackenzie Global

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

The idea behind Mackenzie Canadian Ultra and Mackenzie Global Sustainable 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.