Correlation Between Global X and Mackenzie Global

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

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

Diversification Opportunities for Global X and Mackenzie Global

0.74

Correlation Coefficient

Global X  Mackenzie Global

Poor diversification

The 3 months correlation between Global and Mackenzie is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active 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 Global X 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 Global X Active 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 Global X i.e., Global X and Mackenzie Global go up and down completely randomly.

Pair Corralation between Global X and Mackenzie Global

Assuming the 90 days trading horizon Global X is expected to generate 1.09 times less return on investment than Mackenzie Global. But when comparing it to its historical volatility, Global X Active is 1.05 times less risky than Mackenzie Global. It trades about 0.12 of its potential returns per unit of risk. Mackenzie Global Sustainable is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,554  in Mackenzie Global Sustainable on September 3, 2024 and sell it today you would earn a total of  146.00  from holding Mackenzie Global Sustainable or generate 5.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.06%
Values	Daily Returns

Global X Active  vs.  Mackenzie Global Sustainable

Global X Active

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Active are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Global X 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

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Global Sustainable are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mackenzie Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global X and Mackenzie Global

The main advantage of trading using opposite Global X and Mackenzie Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Active 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..